Tesco is bucking the gloom. It says it enjoyed a strong Christmas, with UK sales up 2.6% over the Christmas period.
CEO Dave Lewis says Tesco is ‘bang on track’ with its plans this year.
The last time John Lewis suspended its staff bonus was in 1953!
They also suspended it during the second world war and in the 1920s, so it would be very significant if they ditch it this year.
John Lewis: Staff bonus may be axed
Crumbs! John Lewis is considering axing its staff bonus this year, after seeing its profits slide.
The John Lewis Partnership, which owns Waitrose, has just warned that full year total Partnership profits will be “substantially lower this year”.
It blames slower sales growth, and tumbling profit margins as it cut prices.
Gross sales at the John Lewis Partnership did rise in the last seven weeks, by 1.4% year-on-year, including a 0.3% rise at Waitrose.
But that wasn’t enough to boost profits, given the “relatively weak consumer demand.”
In a serious blow to its workforce of partners, chairman Sir Charlie Mayfield has warned they may not get a bonus this year – for the first time in many decades.
The actions taken in recent years to prepare for the current pressures in retail mean that the Partnership has the financial strength and flexibility to pay a modest bonus this year, without impacting our ambitious investment programme.
However, the Board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time.’
Last year every John Lewis partner got a bonus worth 5% of their pay; a decade ago it was worth an extra 20%!
M&S hit by falling food and clothing sales
Ouch! Marks & Spencer has reported another quarter of falling food and clothing sales.
Total like-for-like sales at M&S shrank by 2.2% in the last 13 weeks of 2018. That’s worse than the 1.6% expected by City economists.
Food sales – so often a success for M&S – shrank by 2.1% while clothing and homeware was down by 2.4%.
Steve Rowe, chief executive, is blaming “well-publicised difficult market conditions”, but insists that M&S’s transformation programme remains on track.
The combination of reducing consumer confidence, mild weather, Black Friday, and widespread discounting by our competitors made November a very challenging trading period. However, overall our 13-week performance was steady with some early encouraging signs.
Worst Christmas trading in a decade
Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It’s a massive day for retail news, as Marks & Spencer, John Lewis, Tesco, Debenhams and Halfords all report how they fared over crucial Christmas trading period.
And it will have been tough. Britain’s retailers suffered their worst Christmas trading since the depths of the global financial crisis, as anxious customers held onto their money.
The British Retail Consortium has reported that sales were flat in December, the worst performance in December since 2008.
“Squeezed consumers chose not to splash out this Christmas with retail sales growth stalling for the first time in 28 months,” said Helen Dickinson, BRC chief executive.
This forced retailers to slash prices in an attempt to lure customers over the threshold, taking a big chunk out of profits. But even that wasn’t enough to get people splashing out….