Watching the Xmas trading statements

A month ago I said that the Christmas and New Year trading period would be OK for retailers – not brilliant but certainly better than the doom-mongers had forecast. Now is the time of reckoning is upon us. Majestic Wine became the first to issue a Christmas trading statement on 3 January and it was pretty robust.

Sales were up 4.4 per cent in the nine weeks to 1 January and 8 per cent. The chief executive later told Reuters that sales "over Christmas" were up 8 per cent. Significantly it said that sales were especially high among champagne brands, which tend to command the highest prices in its stores.

One positive result does not a good winter make, but it augurs well for the high street. Of course, each trading statement only really tells you something about that company. In this the case the heavy sales of champagne – the CEO indicated as much as 16 per cent growth – combined with the fact that more than a quarter of its stores are inside the M25 highlights the fact that strong sales were in the part of the UK that benefits most from City bonuses.

This bonanza will not be shared equally with all retailers. The profit warnings before Christmas had even begun were issued by HMV and Woolworths, two retailers with a customer-base more weighted towards low-earners.
On the same day that Majestic Wine reported it emerged that Music Zone, a private CD retailers backed by venture capital, was seeking administration.

These are early signs that this Christmas could be that separate the strong brands from the weak. Majestic Wine and John Lewis have done well while we are already know the identity of two of the losers. The Internet had helped create a "long tail" of small brands competing with each other for the consumers’ attention. Only so many can survive. The coming weeks could see the casualty list grow.

In the meantime I will update the incoming trading statements on a separate blog as they emerge over the coming days. In addition the Office for National Statistics, the CBI and the British Retail Consortium will publish their figures.