By James Davey and Neil Maidment
LONDON Jan 16 British retailers who were able
to tap consumers' growing love of online shopping and demand for
must-have tablet computers, gadgets and cheap fashion enjoyed
robust trading in an otherwise tough Christmas for the industry.
A raft of trading updates on Thursday showed companies
including Dixons Retail, Europe's No. 2 electricals
retailer by revenue, Home Retail, Britain's biggest
household goods group, and online-only grocer Ocado
reported strong sales growth over the key festive period.
Primark, the hugely popular discount fashion chain,
also delivered robust trading following a more muted autumn,
while plus-size retailer N Brown said its online sales
now accounted for over half of overall revenue as tablet
computers take the place of traditional catalogues.
Despite signs the British economy is improving, household
incomes have stayed under pressure as inflation outstrips
average pay rises, and retailers' Christmas trading updates have
shown mixed results.
The standout performers, such as Next and John Lewis
, have made a virtue of both their websites and their
physical shops. Those that failed to excel online, including
Morrisons, Debenhams and Marks & Spencer
, have struggled.
Industry data published last week showed that while total UK
retail sales were up 1.8 percent year-on-year in December,
online sales of non-food products grew 19.2 percent, the highest
growth in four years, reflecting the speed of the shift in
demand from physical stores to the Internet.
The pattern was repeated on Thursday, with Home Retail's
Argos reporting its strongest trading on a like-for-like basis
in over 10 years as its move to become a digitally-led, instead
of a catalogue-led, business starts to pay off.
Argos said it had seen strong demand for gaming consoles,
tablets and TVs over the key Christmas trading period, with
Internet sales growing to 46 percent of total sales, up from 42
percent a year ago, helped by rising sales via tablets and
"Customers are looking for strong availability and
immediacy," outgoing Home Retail Chief Executive Terry Duddy
said. The firm said the most popular items were the new
PlayStation and Xbox consoles, Appstar 7 tablet, and Teksta
Across the sector shoppers' growing confidence in ordering
Dixons Retail, home to the Currys and PC World chains in
Britain, Elkjop in Nordic countries and Kotsovolos in Greece,
said web sales had grown by 23 percent, helping the overall
group to lift sales on a like-for-like basis by 3 percent in the
Nov. 1 to Jan. 4 period.
Dixons said its growth had been driven by sales of tablets,
kitchen gadgets and big screen TVs, with a particularly strong
post-Christmas sale in the UK.
"We sold one laptop every four seconds on Boxing Day," said
Chief Executive Seb James.
He said the firm sold all the Apple iPad Air stock it could
get hold of, while Kenwood food mixers flew off the shelves
driven by the huge popularity of "The Great British Bake Off"
The need for a strong online offering has also been the
difference in the hugely competitive grocery sector.
Trading updates from Britain's traditional supermarkets last
week showed they were seeing little, if any, growth in sales at
their stores. But online grocery is booming.
Internet grocery sales in Britain over the Christmas and New
Year period grew 22 percent year-on-year, with 15 percent of
British households placing orders, market researcher Kantar
Worldpanel said on Tuesday.
Online-only grocer Ocado, whose shares have risen over
five-fold in the last year on the back of a deal with Morrisons
, posted gross sales growth of 21.3 percent in the six
weeks to Jan. 5, reflecting strong trading in the seven days up
In clothing, Primark posted a 12 percent leap in
constant-currency sales in the 16 weeks to Jan. 4, in stark
contrast to Marks & Spencer, Britain's largest clothing retailer
which last week posted a 10th straight quarterly fall in
underlying general merchandise sales.
While Primark uniquely achieved its growth without a
transactional website, UK home-shopping group N Brown,
which targets older and larger shoppers, said its customers were
increasingly comfortable with buying clothes using a tablet,
which they found more intuitive than a computer.
"(For) people who are now in their 50s, digital
communication and the development of the online world has been
around for a very long time so it's much less of a new concept,"
CEO Angela Spindler told Reuters.
"The tablet is a really easy browsing tool, so it feels
almost like turning the pages of a catalogue."
Bicycles-to-car-parts group Halfords also reported
better-than-expected sales for the Christmas period, thanks to
very strong demand for children's bikes and cycling accessories
and a 14 percent rise in online sales.
Official data for British retail sales in December will be
published on Friday.