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IRUK Top500 Strategy and Innovation Report: 2018

IRUK Top500 Strategy and Innovation Report: 2018

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Mixed fortunes for multichannel retailers over Christmas

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More than 40% of Argos’ sales are now made online, its parent company Home Retail Group said this week. But while ecommerce is growing, like others reporting this week the company reported falling overall sales in the run-up to Christmas.

In the 18 weeks to December 31, Argos’ sales came in at £1.7bn, down by 7.8% on last year in terms of total sales, and down by 8.8% on a like-for-like basis. Year to date figures showed that the fall is a long-term trend, with like-for-like sales in the year to date, the 44 weeks to December 31, down by 8.9% on last year, at £3.4bn.

Ecommerce sales now account for 41% of Argos’ sales, up from 38% at the same time last year.

Home Retail Group chief executive Terry Duddy said: “Argos sales continue to be impacted by the market decline in consumer electronics categories, however we saw internet penetration reach over 40% of total sales, with Check & Reserve being boosted by the development of mobile commerce as customers embrace our leading multi-channel proposition.”

Sales at Argos’ sister company Homebase were more resilient, but still down by 2.5% on a like-for-like basis in the 18 week period, at £475m, and by 1.3% in the year to date, at £1.3bn.

Chocolate retailer Thorntons saw sales at its ecommerce arm, Thorntons Direct, rise by 8.1% to £5.5m in its second quarter, the 14 weeks to January 7, it said in a trading statement. Total sales rose by 0.6% to £83.7m, compared to the same time last year, but own store sales were down by 6.8% to £44.9m.

Jonathan Hart, Thorntons' chief executive, said: "Overall sales grew 0.6% in an extremely tough retail environment. While this was below our expectations, we nevertheless sold more chocolate in the quarter than ever before. Our online business performed well over the period.”

Meanwhile multichannel retailers Mothercare and Halfords both reported a fall in ecommerce sales.

Nursery specialist Mothercare reported a 1.2% fall in its group sales during the third quarter of its financial year. Ecommerce sales through its Direct in Home shopping channel were also down, by 2.2%, in the 13 weeks to January 7 and down by 3.4% in the year to date.

Total UK sales fell by 6.9% in the quarter, as a result of planned store closures, and by 5.3% in the year to date. Like-for-like sales were down by 3% in the quarter and 5.4% in the year so far. International sales, however, were up by 15% in the quarter and 15.5% in the year to date.

Executive chairman Alan Parker said: “The management actions we have already taken, which include a new web platform to launch next financial year, are expected to improve Direct and overall performance in 2012.”

Finally, Halfords reported online retail sales down by 3.6% in the 13 weeks to December 30, “largely as a result of continuing market contraction within sat nav.” Total group sales in the period were down by 2.1%, and down by 4.4% in its UK retail division.

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