John Lewis marketing push helps Christmas sales soar

John Lewis looks to have outperformed its peers over Christmas once again after its Monty the Penguin marketing campaign and omnichannel service helped push sales up 4.8% amid concerns that the Black Friday promotional event may have pushed down profits for many retailers.

John Lewis' Christmas campaign featuring Monty the Penguin helping push up sales
John Lewis’ Christmas campaign featuring Monty the Penguin helping push up sales

Sales at stores open for more than a year hit £777m in the five weeks to 27 December, with total sales up 5.8%. Store sales were flat while online sales were up 19%, with John Lewis crediting its “market-beating” multichannel service for delivering success.

Online now accounts for 36% of John Lewis sales, up from 32% a year ago, with click and collect overtaking home delivery as the most popular fulfilment choice.

However, John Lewis says shops remain important as places of “inspiration and customer collection”. That was reflected in its Christmas marketing campaign, which included a big push in its stores, alongside digital and traditional activity.

Neil Saunders, managing director at retail analysts Conlumino, says the flat store sales “mask their importance in the wider sales picture”. John Lewis is planning to open more stores this year, including a new Birmingham store that will showcase its latest store formats and technology.

“Without stores that are well invested in and well serviced by staff, it is inevitable that John Lewis’ overall results would have been substantially weaker,” adds Saunders.

The impact of Black Friday

Despite the success, John Lewis’ results show a “fundamental change” in its established trading pattern due to the impact of Black Friday. The event helped the retailer pull in £179.1m in sales in the final week in November, making it the highest sales week of the year, eclipsing Christmas week.

“To some extent the Black Friday boost came at the expense of sales growth in latter weeks with both Christmas week and the one preceding it seeing sales declines compared to last year,” says Saunders.

Other retailers, including Dixons Carphone, have also noted that Black Friday brought forward Christmas sales, rather than adding to them. The success of Black Friday means it surpassed Boxing Day as the “premier shopping event” of the year with 79% more shoppers buying something online on Black Friday than 26 December, according to figures from Qubit.

John Lewis says the event has had an impact on its sales margin, with managing director Andy Street warning retailers to pull back from the event next year and leave it focused on electrical goods. Asda is also thought to be reconsidering its Black Friday push after the event did not produce as much of a halo effect on the rest of the business as it expected.

High street performance

Elsewhere on the high street, Next saw sales rise 2.9% in the 58 days to Christmas Eve – towards the upper end of its guidance. Saunders calls Next’s results a “vindication” of its refusal to engage in pre-Christmas discounting, including Black Friday.

Other retailers are not expected to have performed as well. Analysts predict Marks & Spencer’s sales will have fallen over the Christmas period, pulled down by its clothing business.

M&S widely discounted in the run-up to Christmas, offering 30% discounts on products including knitwear. It will update on its results on Thursday (8 January).

However, it is expected to outperform the wider food market, where Tesco, Sainsbury’s, Morrisons and Asda have all been experiencing sales declines.

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