By James Davey and Neil Maidment
LONDON, Jan 16 (Reuters) - 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 smartphones.
“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 robotic dogs.
Across the sector shoppers’ growing confidence in ordering online
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” television show.
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 to Christmas.
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.