UK retail round up
The UK's largest listed retailers are reporting their quarterly results this week. Tesco, Sainsbury's and Morrisons will all be revealing to the market how they performed over the keenly-watched Christmas trading period. However, with the gloomy consumer environment persisting, the news may be distinctly lacking in festive cheer.
UK retailer Tesco benefited from an increased uptake of own label products in the UK, where it has relaunched various products in its own brand line-up as part of its turnaround strategy.
UK retailer Tesco booked better-than-expected UK sales over the key Christmas trading period as the group benefited from the various initiatives under its domestic turnaround plan. The group has invested in improving its customer proposition over the past nine months. UK shoppers have responded positively, driving like-for-like sales gains. However, the City reaction has been somewhat mixed, with some analysts highlighting last year's weak comparables while others have hailed Tesco's early gains.
UK retailer Tesco reported an increase in underlying UK sales today (10 January) as it named Chris Bush as head of its domestic operations.
Sainsbury's today (9 January) reported that third-quarter like-for-like sales, excluding fuel, came in at 0.9%. While this represents a slow-down from the company's previous 31 consecutive quarters of growth, Sainsbury's was able to increase its market share during the key Christmas trading period. Sainsbury's star-performer was once again its own label offering and the group was upbeat on the success of its promotional strategy. However, when inflation and the contribution from store expansions is stripped out, the group saw sales volumes decline. With the likelihood that the 2013 competitive environment will remain tough, the challenge will be for Sainsbury's to maintain its growth momentum. Here is the City's verdict.
More frugal consumers are evolving the way they shop in response to the austere economic environment, Sainsbury's CEO Justin King has suggested.
Sainsbury's has booked a 3.9% increase in quarterly sales, boosted by the supermarket group's "strongest ever" Christmas trading period.
Morrisons has once again booked a decline in like-for-like sales worse than the overall market, as the group struggles to maintain its share in the face of a highly price-focused consumer. According to management, the "greatest headwinds" that it is facing are its lack of an online and convenience offering. Morrisons has also insisted that it needs to address issues with its marketing and promotional strategies. However, there are those in the City that worry the group's problems go beyond the way that it communicates its message to the message itself.
Morrisons today (7 January) hinted that an announcement regarding its long-awaited launch into online retail could be nearing.
UK supermarket group Morrisons has booked a "disappointing" set of results for the quarter to 30 December, with trading over the key Christmas period lagging the overall weak market.
It was not a good Christmas for UK retailers this year. But, as we gear up for next week's round of results form the largest UK supermarket operators, Katy Askew believes it is clear the sector is also grappling with some more meaty issues.
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