John Lewis marketing activity boosts Christmas sales

John Lewis looks to have outperformed its peers over the Christmas period after its bear and hare campaign and multi-channel service helped push sales up 6.9% amid warnings the deep discounting on the high street in the run-up to Christmas Day has driven down festive period profit for many in the sector. 

John Lewis posts 6.9% increase in sales over Christmas but rivals’ profitability suffers from discounting.

John Lewis says sales from stores open for more than a year grew to £734m over the five weeks to 28 December. Like for like sales compared with Christmas 2011 were up 20.5%.

Gains were driven by a 22.6% increase in online sales. The department store says sales from its website accounted for almost a third (31.8%) of its total income over the festive period.

Andy Street, managing director of John Lewis, claimed the retailer has had a “genuine omni-channel Christmas.”

“The shift to mobile devices for online shopping has been confirmed but the in-store sale is well and truly thriving…..,” he adds.

Street also credited its bear and hare television advertisement and related merchandising for the sales lift. “Many fell in love with our TV advert which has received over 11.5 million views on YouTube since launch. The soundtrack reached number one in the charts on two occasions, soft toy versions of the bear and hare flew off the shelves, young shoppers visited our in-store caves in droves and the book telling the story of the characters was our best-selling children’s title,” he adds. 

House of Fraser today (2 January) also delivered a robust festive trading update. Like for like sales increased 6.3 per cent for the 6 weeks to 5 January, the retailer says. 

Despite the robust performance reported by John Lewis and House of Fraser, there are concerns that many on the high street  struggled over the festive period because of level of discounting and its impact on profit margins. Many high street names cut prices more deeply and earlier to boost lower than hoped for footfall in December.

Earlier this week, Debenhams issued a profit warning stating same store sales for the 17 weeks to 28 December increased 0.1%, below expectations. Michael Sharp, chief executive of Debenhams, blamed “unprecedented” promotional activity.

“As has been widely commented on in the media, the market was highly promotional in the run up to Christmas and we responded to these conditions to ensure our offer was competitive. However, this extremely difficult environment has inevitably had an impact on both our sales and profitability,” he added.

Analysts have warned that Debenhams will not be the last high street name to suffer from the high levels of promotional activity.

Neil Saunders, managing director of retail analysts Conlumino, says: “The position of Debenhams is one that will be repeated by a number of retailers. It is likely that many will have had a disappointing season in terms of sales, but especially in terms of profitability.”

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