Britons spent more than expected over Christmas, Next, one of the country's biggest clothing retailers, said on Thursday in a sign that resilient shoppers helped the sector dodge a cost-of-living crisis that threatened to hit festive sales.
But a slowdown looms this year, said Next warning that British shoppers were set to cut back on spending.
Britain is currently bottom among the Group of Seven major advanced nations in terms of quarterly growth.
In November, the Bank of England forecast Britain was heading into a long recession, with inflation not returning to its 2 per cent target until early 2024, and the government's budget watchdog predicted the biggest squeeze on living standards since records began in the 1950s.
In the run-up to Christmas, however, Britons opened their wallets. Next's sales grew by almost 5 per cent compared to last year, beating expectations.
Discounter B&M and fast food chain Greggs also reported higher sales, showing the importance of value in straitened times.
Health and beauty retailer Boots UK reported a jump in December sales, highlighting strong demand in key categories such as fragrance.
Next's performance lifted British retail stocks on hopes that Christmas, which is key to retail profit, will be better than expected across the board.
Leading the charge, Next was up 8 per cent, while Primark-owner AB Foods rose 3 per cent6, clothes and grocery chain Marks & Spencer traded up 5 per cent. JD Sports, online fashion retailer ASOS and electrical retailer Currys were up about 3 per cent.
With 500 stores and a big online presence, Next is viewed as a gauge of how consumers in Britain are faring. Chief executive Simon Wolfson said coats and winter clothes sales benefited from cold weather in December.
"We thought December would be particularly difficult and it's turned out to be much better than expected," he told Reuters.
Hunt for Savings
Shops at the value end of the scale did even better than Next.
B&M, which sells products ranging from toys to frozen goods and garden furniture, posted a 6 per cent rise in comparable Christmas sales, and Greggs whose snacks and coffees are cheaper than many rival cafes, said its sales were up 18 per cent in the period.
On Tuesday the British arm of German discount supermarket group Aldi said its December sales rose 26 per cent compared to the previous year, another sign of the hunt for savings from cash-strapped shoppers.
Grocery industry data from market researcher Kantar on Wednesday showed record Christmas sales - albeit driven by food inflation of 14.4 per cent.
Retail sales also benefited from busier town centres, shopping malls and retail parks, both before and after Christmas as Britons returned to stores after the previous two years when festive shopping habits were curtailed by the COVID-19 pandemic.
Shopper numbers across Britain in December rose 5.8 per cent from November and were up 9.9 per cent compared to 2021, research company Springboard said.
However, shoppers' resilience will not last into this year, according to Next.
Mid-market retailers, such as Next, are likely to be squeezed particularly going forward, as value end and luxury goods seem to be holding up.
Next expects sales to fall by 2 per cent in 2023, as Britons start to react to rising mortgage costs, with more people coming to the end of fixed-price deals, and as higher energy prices increase pressure on household budgets.
After a year marked by the return of double-digit inflation - currently standing at 10.7 per cent - the group said it expected its cost inflation to peak in the Spring/Summer season and fall to no more than 6 per cent in the second half.
A fuller picture of Christmas sales will emerge next week when Tesco, Sainsbury's, M&S, JD Sports Fashion and ASOS all update on trading.
Some Brits believe that shoplifting can be acceptable, states a recent report, despite the country experiencing an epidemic of store thefts.
According to a recent YouGov poll of 2,150 adults, 40 per cent of the public agreed that shoplifting food was sometimes acceptable if a person could not afford the goods. More than half of those asked (51 per cent) said it was never acceptable.
About 20 per cent believed it was sometimes acceptable to steal clothes from a store if they could not afford them, with 72 per cent saying it should never be accepted.
This was despite the fact that nearly three-quarters of the public (73 per cent) believed shoplifting was a serious or fairly serious crime, while only a quarter (25 per cent) felt it was not very serious or not serious at all.
There was a distinct divide politically between acceptance of the crime. Only 20 per cent of Tory voters believed that food theft was acceptable if a person could not afford it, compared with 50 per cent of Labour voters and 44 per cent of Liberal Democrat supporters.
The staggering figures come as stores across the country are reporting two thefts a minute amid a growing shoplifting epidemic.
Industry body the British Retail Consortium's (BRC) annual crime survey found more than 20 million incidents of theft were committed in the year to 31 August 2024, which equates to 55,000 a day, costing retailers a total £2.2 billion.
There were 16 million incidents in the previous year.
The BRC said many more incidents in the latest period were linked to organised crime, with gangs systematically targeting stores across the country.
Commenting on the BRC's findings, Helen Dickinson said, "Retail crime is spiralling out of control. People in retail have been spat on, racially abused, and threatened with machetes.
"Every day this continues, criminals are getting bolder and more aggressive."
The BRC said the amount spent on crime prevention also hit a record high, with retailers investing £1.8 billion on measures such as CCTV, security personnel, anti-theft devices and body-worn cameras, up from £1.2 billion in 2022-23.
Shopper footfall received a welcome boost as many consumers hit the January sales in their local community, shows recent data, bringing a welcome news for high streets following a particularly difficult Golden Quarter to end 2024.
According to BRC-Sensormatic data released today (7), total UK footfall increased by 6.6 per cent in January (YoY), up from -2.2 per cent in December.
High Street footfall increased by 4.5 per cent in January (YoY), up from -2.7 per cent in December while retail park footfall increased by 7.9 per cent in January (YoY).
Shopping Centre footfall increased by 7.4 per cent in January (YoY), up from -3.3 per cent in December.
Footfall increased year-on-year in all four UK nations, with Wales improving by 8.5 per cent, England by 7.4 per cent, Northern Ireland by 3.5 per cent, while Scotland improved by 1.0 per cent.
Helen Dickinson, Chief Executive of the British Retail Consortium, said, "Shopper footfall received a welcome boost in January following a disappointing festive period.
"Store visits increased substantially in the first week of the month as many consumers hit the January sales in their local community, with shopping centres faring particularly well.
"Despite snowy weather and Storm Eowyn causing disruption in some areas, footfall was still positive across major UK cities over the whole month.
"Improved shopper traffic is welcome news for high streets following a particularly difficult ‘Golden Quarter’ to end 2024, and low consumer sentiment to start the year.
"Retailers want to invest more in stores and staff to enhance the shopping experience for customers and help to grow the economy, but the swathe of additional costs from April will limit investment and lead to job losses and higher prices at the tills. To drive growth in communities across the country, the government must ensure costs are limited in other areas.
"This can be done by delaying packaging taxes and ensuring that business rates reform leaves no shop paying more than they currently do."
Andy Sumpter, Retail Consultant EMEA for Sensormatic, commented, "After a dreary December, retailers will welcome January’s footfall jump.
"The uptick was boosted by a very strong Week 1, helped in part by New Year’s Day falling on a Wednesday, which may have prompted ambient store traffic as consumers bolted on additional days of leave, as well as retailers extending post-Christmas discounting well into January.
"Not even the significant disruption from Storm Eowyn was enough to dampen overall footfall performance. While welcome, after months of erratic and constrained footfall, the jury’s out as to whether January’s store performance signals the start of a sustained High Street revival or if it will be a flash in the pan come February.
"And, even if shopper traffic recovery has finally turned a corner, the challenge for retailers will be solving the next conundrum; how they balance enhanced footfall – which requires optimised store staffing to convert into sales – and the significant rises to labour costs borne out of the Budget on the one hand, with consumer appetite for discounts - a long-term margin-eroder - on the other, which will not be an easy circle to square."
Another report released on Thursday (6) stated that high streets need to optimise for midweek office workers as Brits return to office.
This marks the first annual increase in January footfall since 2016 (+1.2 per cent), outside of the pandemic period, suggesting that a stronger return to office work is driving retail visits as businesses push employees back to in-person work.
Keep ReadingShow less
New Ann Forshaw’s Milk Shed launches at SPAR Derwent in Keswick
SPAR Derwent in Keswick has become the latest store to introduce an Ann Forshaw’s Milk Shed, bringing fresh whole milk and delicious flavoured milkshakes to the local community.
The new Milk Shed follows successful launches at Ann Forshaw’s Alston Dairy and SPAR stores in Burnley and Milnthorpe.
The vending machine, open 24-hours-a-day, dispenses gently pasteurised, non-homogenised milk, available in 500ml (£1) and one-litre (£1.60) servings, with milk delivered daily from Alston Dairy at Longridge, near Preston, the home of the Ann Forshaw’s brand.
Milkshakes, priced at £1.80 for 500ml and £2.80 for one litre, come in Chocolate, Strawberry, Banana, Vanilla, and Salted Caramel flavours. A sixth Limited Edition flavour will always be on rotation to complement the core range – starting with Red Velvet for Valentine’s Day, and special edition glass bottles with love hearts on them will be available to purchase from the machine.
To celebrate February half-term, a retro throwback range featuring Cream Soda, Parma Violet, Cola, Lime, Candy Floss, and Mixed Berry will also be available.
Ann Forshaw’s Milk Shed at SPAR Derwent
All the milkshakes use natural flavourings and colourings where possible and do not contain the ‘Southampton Six’ food colours which have been found to have an adverse effect on activity and attention in children.
Eco-conscious customers can opt for Milk Shed branded reusable glass bottles for plastic-free refills. Plus, recyclable cups and paper straws are available for a greener experience.
“Wherever we launch an Ann Forshaw’s Milk Shed, our SPAR customers love the concept, and we have high hopes that our latest launch will be lapped up by the community in Keswick,” Fiona Drummond, Company Stores Director at James Hall & Co. Ltd, said.
“There is nothing not to like about the product. The milk is competitively priced, and the milkshakes are a delicious treat and suitable for all ages with the conscious decision to utilise natural flavourings.”
There is more to come for SPAR customers in Cumbria this Spring with rollouts of Milk Sheds taking place soon at SPAR Bowness, SPAR Maryport, and SPAR Whitehaven.
Ann Forshaw’s and its associated Alston Dairy was acquired by the James Hall Group of Companies in December 2022.
Keep ReadingShow less
SPAR Cavehill raised funds for Community Fire & Rescue Service as part of former owner’s 70th birthday celebrations
Belfast’s SPAR Cavehill closed out 2024 with a heartwarming community celebration, marking the 70th birthday of former store owner Norman Porter while raising £800 for two local charities.
The event, organised by the store’s current owners, Frank Quigley and Norman’s daughter, Jenny Reilly, brought together staff, customers, and local residents to celebrate the milestone birthday and support SPAR’s charity partner, Marie Curie, as well as the Community Fire & Rescue Service.
Norman, who owned and operated SPAR Cavehill for over 40 years, remains an integral part of the store’s daily operations even after passing ownership to Jenny and longtime store manager Frank in 2015. His longstanding presence in the community made the occasion particularly special.
“It was important to me and the whole team to celebrate dad’s 70th birthday,” Reilly said. “Having owned and run SPAR Cavehill for over 40 years, he is a well-known and respected figure in the local community, so our shoppers were delighted to join in the celebrations and show their appreciation.”
The in-store birthday party featured cake, coffee, and treats in exchange for donations, while customers also had the opportunity to win prizes with the SPAR Spinner. Special guest Sammy SPAR made an appearance, adding to the festive atmosphere. Volunteers from the Community Fire & Rescue Service attended to thank shoppers for their support and raise awareness of their vital services. Additionally, the Dale Farm van stopped by to distribute ice lollies in return for contributions to Marie Curie.
“Being a hub in the community, it’s always been important to us to show our support, so it was a no brainer to mark my dad’s birthday by fundraising for two local charities,” Reilly added.
“The celebrations were a great success, and we were thrilled to see so many of our community coming together to show their support, helping us raise a total of £800 for Marie Curie and Community Fire & Rescue Service. I want to extend a huge thank you to our shoppers and our team at SPAR Cavehill.”
Expressing his gratitude, Norman Porter said: “Thank you to the team at SPAR Cavehill, our shoppers and whole community for celebrating my 70th birthday with me. It has been a privilege to serve the community for so many years and we have appreciated their ongoing support for the store. A special thank you goes to my daughter Jenny for making it a birthday to remember.”
Keep ReadingShow less
IQOS heat-not-burn device and a Marlboro cigarette pack
Philip Morris International (PMI) has forecast an increase of up to 12.5 per cent in adjusted diluted EPS for 2025, following a strong financial performance in 2024, driven by the continued expansion of its smoke-free product portfolio.
The company delivered a reported diluted EPS of $4.52 (£3.63), or $6.01 before a Canada non-cash impairment of $1.49, compared to $5.02 in 2023. Adjusted diluted EPS reached $6.57, representing growth of 9.3 per cent, and 15.6 per cent on a currency-neutral basis.
“2024 was a remarkable year for PMI,” said Jacek Olczak, PMI chief executive. “We delivered very strong full-year results driven by the continued growth of IQOS and ZYN in addition to a robust combustibles performance.”
Olczak highlighted the recent US FDA authorisation of all currently marketed ZYN nicotine pouches, calling it “further evidence of the compelling science supporting smoke-free products.” He also urged other countries to follow the US lead and embrace effective tobacco harm reduction measures, particularly where smoke-free alternatives are banned.
Quarterly shipments of heat-not-burn (HTU) and oral smoke-free products exceeded 40 billion units for the first time. Full-year net revenues for the Smoke-Free Business increased by 14.2 per cent (16.7 per cent organically), with gross profit up 18.7 per cent (22.7 per cent organically). Smoke-free products now account for 40 per cent of PMI's total net revenues and approximately 42 per cent of gross profit. The company estimates 38.6 million adult users of its smoke-free products.
IQOS continues to be a strong performer, strengthening its position as the second-largest nicotine ‘brand’ in markets where it is present. HTU adjusted in-market sales (IMS) volume was up an estimated 12.6 per cent for the full year. In Japan, ILUMA i fuelled IQOS growth, with adjusted IMS up around 13 per cent for both the full year and the fourth quarter. In Europe, IQOS HTU adjusted market share increased to 10.6 per cent in the fourth quarter. VEEV is also gaining traction as a top 3 pod brand in 13 European markets.
In the oral smoke-free products business, full-year shipment volume increased by nearly 28 per cent in cans (nearly 25 per cent in pouches). Fourth-quarter shipment volume increased by 25 per cent in cans (22 per cent in pouches), driven by ZYN nicotine pouch growth in the US.
Full-year net revenues grew by 4.0 per cent (5.9 per cent organically) in the combustibles business, primarily due to strong pricing.
For 2025 fiscal, PMI forecasts reported diluted EPS to be in the range of $6.55 to $6.68. Excluding adjustments, this reflects a 7.2 per cent to 9.1 per cent increase compared to 2024’s adjusted EPS of $6.57, or 10.5 per cent to 12.5 per cent growth on a currency-neutral basis.
The company anticipates total cigarette and smoke-free product shipment volume growth of up to 2 per cent, driven by smoke-free products. Net revenue growth is projected at around 6 per cent to 8 per cent on an organic basis.
“With strong momentum across all categories, we are confident that our smoke-free transformation and unparalleled brand portfolio will continue to deliver excellent performance and create value for our shareholders in 2025 and for the long term,” Olczak said.
The forecast assumes an estimated 1 per cent decline in international industry volume for cigarettes and HTUs (excluding China and the US), and an acceleration in US nicotine pouch shipment volume. It also factors in capital expenditures of approximately $1.5 billion, including further ZYN capacity investments in the US.