High street winners and losers emerge from mixed Christmas

This week’s flurry of updates confirmed it was once again a highly-competitive Christmas for retailers, with online sales proving a key battleground and squeezed shoppers spending cautiously.

While supermarkets generally enjoyed robust food sales, it was otherwise volatile with many clothing chains resorting to heavy discounting to offset tougher trading.

A profit upgrade from Next and contrasting earnings alert from Debenhams last week set the scene for a mixed performance and the latest clutch of sales reports show it was by no means a jolly Christmas for all.

Retail bellwether Marks & Spencer blamed unusually warm weather in October for a 2.8% fall in like-for-like clothing and home sales over the 13 weeks to December 30. Its food sales also disappointed, down 0.4%, as it admitted the division was suffering “ongoing under-performance”. It insisted both divisions saw better trading in the key Christmas weeks.

Britain’s biggest supermarket Tesco delivered a solid performance, with UK like-for-like seasonal sales up 1.9%, driven by a strong grocery performance.

This helped it notch up a 2.3% rise in third quarter comparable sales. Food sales grew 3.4% on a like-for-like basis over Christmas, and the only blot was a drag from a 0.6% decline across general merchandise and tobacco sales, which the firm blamed on the collapse of wholesaler Palmer & Harvey.

General merchandise was also the Achilles heal for Sainsbury’s as it reported a 1.1% rise in like-for-like sales over the 15 weeks to January 6. It upgraded its full-year profit forecast following the solid overall performance, but saw non-food sales, including Argos, fall 1.4% and warned of a challenging market.

Lidl claimed it was the “fastest growing supermarket” over Christmas after booking a 16% leap in festive sales in December, although it did not give a breakdown of like-for-like sales.