More department store gloom from Christmas sales analysis

12th February 2018

There was further disappointment for UK department stores over Christmas 2017, according to a full analysis now published by GlobalData.

The data company says that department stores underperformed over the festive season, with traditional middle market players House of Fraser and Marks & Spencer revealing especially disappointing sales and Debenhams doing little better. Meanwhile, online fashion retailers performed well.

‘‘What is certain is that investing in multichannel is vital to long-term survival as shopper reluctance to visit department stores takes its toll and shoppers increasingly turn to buying online,” says GlobalData retail analyst Sarah Johns.

Meanwwhile a 7.2% and 6.9 drop in like-for-like and online sales at Mothercare made it one of the worst performing players in retail this Christmas. Johns adds, ‘‘While Mothercare was not alone in reporting negative online sales (House of Fraser’s was down 7.5%), it is disappointing that e-commerce sales fell so sharply when growth in online retail spending grew 7.6% in 2017 and so many other retailers reported double-digit growth in this channel.’’

GlobalData is also predicting a slowdown in the growth of Valentine’s gift market this year. Although sales are set to top £1bn this year, the increasing success of discount stores in the sector is likely to reduce overall growth in spend, according to its figures.

“Although in the past Valentine’s Day was seen as an opportunity to spoil loved ones and shower them with luxury gifts, with 45.8% of consumers last year thinking Valentine’s Day is a waste of money and 56.2% believing it costs too much, consumers are expected to be more willing to receive and shop for cheaper gifts at discount players,” says GLobalData retail analyst Eleanor Parr. “After a successful year for many discounters in 2017, these retailers are likely to gain further share in the Valentine’s Day market as they continue to improve consumer perception of their ranges by introducing more luxury options alongside their value assortments.”