Retailers have reiterated this point, with Next expecting to see like-for-like price increases of 3.7% in H1 2022, and up to 6% in H2 2022.Ĭonsumer behaviour is also likely to adapt in the face of rising inflation, with a potential shift back to more cautious spending patterns.
The ONS Consumer Price Index rose 5.4% in December, its highest annual rise since March 1992. Next reported that stock was “materially lower than planned” in the lead up to Christmas, while the general merchandising segment of Sainsbury’s suffered YoY sales decline of -16%, reflecting delays and limited product availability experienced across Argos.Īs retailers struggle to absorb the rising costs associated with manufacturing, freight and wages, retail prices have subsequently begun increasing. Reference to supply chain disruption/uncertainty featured heavily amongst statements.
Outlook for retailers is particularly cautious amidst ongoing headwindsĭespite an inherently positive trading period on the whole, there was a clear sense of caution amongst trading statements as the sector tackles multiple headwinds. For example, Tesco is extending their one-hour delivery service, Whoosh, to 200 stores by February, while traditionally in-store-only chain, Aldi, opened Click & Collect capabilities to over 200 stores in 2021. Most grocery chains are utilising their widespread store networks to enhance online fulfilment from larger format physical stores. Fewer restrictions in 2021 supported celebratory food and drink sales as consumers enjoyed time with friends and family. Grocery spend over the Christmas 2021 period exceeded 2019 levels across every major UK chain, according to Kantar data, although reporting relatively flat sales off the back of heightened 2020 levels. Wickes reported group like-for-like sales decline of -5.0% YoY, but a healthy +14% uptick compared to equivalent 2019 revenue, in line with the launch of its new DIY app, which is reportedly experiencing strong conversion rates. On average by sector, the DIY and homeware sector reported the strongest growth compared to Christmas 2019, averaging +19.0%, albeit the bumper sales recorded in 2020 resulted in more borderline YoY figures.
Dunelm reported record Christmas sales (up +13% YoY and +26% against 2019 levels), in line with its new e-commerce facility, enabling shorter lead times for online orders. Omnichannel-related growth hasn’t been limited to the fashion sector. Homeware sales robust against 2019 levels Primark, for example, reported year-on-two-year total revenue declines of -5% in the 16 weeks to 8 January, despite adding a further 25 new sites to its portfolio over the period. Retailers lacking a strong omnichannel position struggled to recover at the same pace. However, M&S did note that in-store sales aren’t uniformly negative, with sales across retail parks up against 2019 levels, whereas challenged footfall continues to hinder city centre store sales. Online sales compared to 2019 levels experienced an uptick of +56.0% on average across all sectors, while total in-store sales averaged -2.7% over the same period, for those who reported the breakdown.įor the case of the clothing and homeware tranche of M&S, in-store sales fell -10.8% compared to 2019 levels in the 13 weeks to 28 December, while online sales recorded a sizeable +50.8% growth. This year once again emphasised the importance of an omnichannel offer, with online sales propelling total revenue growth for many retailers. The likes of Seasalt, Next, JD Sports and FatFace all posted double-digit growth, with many retailers in the sector raising their full-year revenue forecasts as a result of strong final quarter trading. Fashion/footwear reported a strong rebound, driven by omnichannelįashion retailers reported the strongest average sales growth by sector on a YoY basis, off the back of the widespread temporary store closures in December 2020.
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