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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Asos and Tesco report record-breaking Christmas trading; Mothercare, Burberry, Moss Bros, JD Sport updates

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Asos and Tesco report record-breaking Christmas trading; Mothercare, Burberry, Moss Bros, JD Sport
Asos and Tesco report record-breaking Christmas trading; Mothercare, Burberry, Moss Bros, JD Sport
Asos and Tesco both reported record-breaking Christmas sales as they updated the markets on their festive trading this week. Updates also came from Burberry, Moss Bros, Mothercare and JD Sports.

Pureplay fashion retailer Asos , a Model retailer in the IRUK Top500 research, said it set new records over the course of the Cyber weekend at the end of November. Group revenue of £459.7m in the four months to December 31 was 27% up on the same time last year. Retail sales of £446.9m were 27% up, with UK sales of £206.2m 25% ahead. The fastest growth was in the EU where sales of £111.0m were 40% up on last time.

Nick Beighton, chief executive, said: "We had record sales over cyber weekend in late November and have seen further growth in average order frequency, average basket value and number of orders, alongside an acceleration in active customer growth to +18%."

Tesco's online grocery service set a new record at Christmas. The supermarket, a Leading retailer in the IRUK Top500, said more orders were delivered on December 22 than on any previous day.

The update came as Tesco said like-for-like sales grew by 2.1% in the 19 weeks to January 9, with sales up by 1.3% in the UK. Customer transactions were up by 3.4% over the same period. Revenues had improved since the third quarter, the 13 weeks to November 28, when group like-for-like sales came in 0.5% down, and UK sales 1.5% down.

Chief executive Dave Lewis said sales had strengthened as prices decreased on a wide range of products. "Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco," he said.

Fellow IRUK Top500 Leading retailer Mothercare said online sales represented a third of total UK sales following an 11.8% jump in ecommerce transactions in its fourth quarter. Overall, UK like-for-like sales, which strip out the effect of store openings and closures, were up by 4.2.% in the 13 weeks to January 9, but total UK sales fell by 0.1% following a 6.1% reduction in store space, year-on-year. Online and improved store performance, it said, helped to recover some of that lost ground in the UK – but group sales were down by 5.4%.

Chief executive Mark Newton-Jones said that a strong online performance had helped Mothercare to maintain its full-price strategy until the end-of-season sale after peak trading. "Margins have been preserved and remain within our guidance for the full year," he said.

Moss Bros , a Top100 retailer in the IRUK Top500 rankings, said its ecommerce sales were 32.7% ahead in the 49 weeks to January 9. "Our mobile and tablet sites continue to grow strongly," it said. "We continue to see good growth and ecommerce sales now comprise 10% of group revenue."

The udpate came as the formalwear hire and retail business said total sales in the 23 weeks to January 9 were 4.8% up on last time, with like-for-like sales 4.2% ahead.

Brian Brick, chief executive officer, said: "We are pleased with the progress of our promotional strategy, with fully coordinated and better targeted offers in our retail business. This has allowed more consistent full price trading, particularly through the Black Friday trading period, with gross margins showing a sustained improvement as a consequence. This is despite a challenging Autumn trading environment, with unseasonably warm weather conditions.

Burberry , a Top150 retailer in the IRUKTop500, said digital had outperformed, as it reported a 1% rise in retail revenues to £603m in the three months to December 31. Most traffic to burberry.com now comes via mobile, and Burberry said conversion via mobile was up year-on-year following investment in the mobile platform. The luxury retailer has also expanded its single pool of inventory model in both its US and UK markets. It said a focus on retail productivity had driven conversion in store and online.

Over Christmas, it said it saw good response to festive initiatives in marketing and customer service, and that sales to domestic customers increased in all three of the regions it serves.

Christopher Bailey, chief creative and chief executive, said: "In a tougher environment than expected, our sustained focus on growth and cost control drove a number of positive results over the quarter, including the outperformance of digital and a return to growth in mainland China.

"While Burberry was impacted by the ongoing challenges facing the luxury sector, headwinds in Hong Kong and Macau masked an otherwise stronger performance in many markets. The outlook for our sector remains uncertain as the consumer and environment evolve. However, we are anticipating and responding to these changes through an intense focus on new growth opportunities and the acceleration of our productivity and efficiency agenda."

Looking ahead, the retailer said it expected new retail space to boost retail sales growth at "low single-digit percentage" levels.

Top150 retailer JD Sports said like-for-like store sales were up by 10.6% in the five weeks to January 2, and that pre-tax profits were likely to be as much as 10% ahead of current market expectations of £136m. It also said it had decided not to continue with an project to replace the group's core IT systems, but that it would continue to develop its in-house developed systems. That would result in a one-off charge of £10m.

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