Winners and losers on the UK high street

Investors were greeted to a deluge of retail results on Thursday morning, offering a mixed picture of the state of the UK high street in the run-up to and during the Christmas period.

Marks and Spencer announced a striking recovery in clothing sales over the Christmas period — in the 13 weeks to December 31, like-for-like sales of clothes and homeware rose 2.3 per cent, while food sales were up just 0.6 per cent.

In November, prospects for clothing looked so bad that M&S announced a far-reaching store closure programme, shutting 30 “full-line” stores and removing clothing and homeware sections from a further 45 locations. Shares rose 3 per cent.

Tesco continued the relatively good news from the supermarket sector this week, following positive updates from Morrison’s and Sainsbury’s by reporting like-for-like sales growth of 1.5 per cent in the 13 weeks to November 26, and group like-for-like sales growth of 0.3 per cent in the six weeks around Christmas.

This represented Tesco’s first quarterly market share gain since 2011 — and its eighth consecutive quarter of like-for-like volume growth. Tesco shares shed 2.7 per cent, leading the losers on the FTSE 100.

Primark also had a stronger Christmas. Its owner, Associated British Foods reported sales up 11 per cent year on year, on a constant currency basis, thanks mainly to increased retail selling space. Sales were 22 per cent ahead of last year before allowing for the hot from a weaker pound.

Adjusting again for the fact that last year was a 53-week year for Primark, total retail sales at constant currency were 12 per cent ahead. However, on a like-for like basis, ABF would only say that Primark’s UK sales for the period were “good”, and overall like-for-like sales were held back by declines in Germany and the Netherlands. ABF shares dropped 2.1 per cent.

AO World, the domestic appliance website, said overall UK revenue rose by 8.9 per cent, “against tough comparators from the same period last year”. Shares dropped more than 6 per cent.

Asos — the online fashion retailer, continued to power ahead: retail sales grew 30 per cent on a constant currency basis as investments in pricing and product range paid off.

Supergroup announced half-year results for the period to November 29, in which retail like-for-like sales rose 12.8 per cent. Notably, “online participation” in those sales increased to 21.6 per cent. In the 10 weeks around Christmas, like-for-like sales growth was 14.9 per cent.

Debenhams also achieved online sales growth in the 18 weeks to January 7. Group like-for-like sales were up 3.5 per cent, but only 0.5 per cent in constant currency terms. However, online sales advanced 13.9 per cent — taking two year growth above 25 per cent. The stock gained 3.3 per cent.

Mothercare has recovered slightly, returning to sales growth in the UK, where like-for-like sales were up 1 per cent in the last quarter — thanks to online sales growth of 5.5 per cent. Online sales now represent around 40 per cent of UK sales. Shares edged up 1.1 per cent.

Last year, the group fell back to a loss in its interim results, as poor summer weather and the costs of its prolonged turnround efforts hit its domestic business.

Dunelm achieved only 0.2 per cent like-for-like sales growth in the 13 weeks to December 31 — but its online business achieved a 21.7 per cent increase in home delivery sales for the quarter. Shares slipped 1.4 per cent.

JD Sports reported only that cumulative like for like store sales growth for the 49 weeks to 7 January 2017 had continued at the 10 per cent rate reported in September. The stock jumped 6.1 per cent.

Moss Bros like for like sales for the 23 weeks to January 7 were up 6.1% on last year.