Christmas cheer for most shops

THE festive season was not as grim as many retailers expected, with 41% of firms reporting a sales rise during the Christmas period, according to business adviser Grant Thornton.

THE festive season was not as grim as many retailers expected, with 41% of firms reporting a sales rise during the Christmas period, according to business adviser Grant Thornton.

The entertainment sector performed particularly well, with an increase of 3.7% in like-for-like sales, as computer games, books, CDs and DVDs were snapped up for Christmas presents.

The period saw a 10% like-for-like sales increase for Game Group, but Zavvi was put into administration, despite it featuring in Grant Thornton’s top five performers for Christmas 2007, when it boasted a 10.8% increase.

Food and drink also performed well, being the only other sector to increase like-for-like sales, with a 1.7% increase.

The home ware sector reported the biggest drop at 11.3%, as reflected by recent sales figures from Homebase showing a 10.2% fall in sales. Department stores did not fare well either, with an average drop of 3%.

David Bush, head of retail services at Grant Thornton, said: “Our overall conclusion is that this Christmas has been difficult for retailers but not the disaster that most commentators were predicting. Many of the Christmas statements that we have analysed make reference to the need to improve working capital, sell out old stock and reduce indirect costs.

“All this is important, but the fundamental strength of the best retailers is that they sell products that the consumer want at the best value. It is crucial to stress that this does not mean the cheapest price but being great value for money.”

Grant Thornton analysed trading updates from 37 firms to produce its results. The company also found that internet retailing is continuing to grow, with December sales up 14.2% on the previous year, driven by customers going online to look for the cheapest price.

Other winners on the high street have included discount clothing chains Primark, whose parent Associated British Foods said sales soared 18% in the 16 weeks to January 3, and New Look, where like-for-like sales rose 2.8%.

Mothercare posted a 1% rise in third-quarter UK sales, helped by the demise of Woolworths, while JD Sports enjoyed a like-for-like sales increase of 2.8%.

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