Business to Business News

A surge in online retail sales, caused by the bargain hunters, has badly affected high street sales of those stores which do not conduct online business. Read the rest of this entry »

Last Saturday, fashion giant Primark’s London store delivered its biggest one day sale in its 39-year history.

It is reported that Primark’s Oxford Street store sold in excess of £600,000, despite consumer slowdown all over the UK. Sales were boosted by a traffic-free day prior to Christmas and were much ahead of sales in London’s West End last year. Read the rest of this entry »

With the remaining days of Christmas shopping will be most decisive for the struggling high street stores, depending on how much prepared cash strapped shoppers are to spend on festival celebrations. The last week is generally the busiest days for the retail industry, which partly compensate for consumer downturn prevailing through other days of the year. Read the rest of this entry »

In its attempts to lure cash strapped customers with cheaper products, Tesco’s sales growth touched it’s lowest since mid-1990s.

The biggest supermarket chain in Britain, reported that excluding petrol its like-for-like sales rose only by 2% in past 3 months, amounting to half the growth it had achieved in the previous quarter. Read the rest of this entry »

Heavy discounting offered by the rivals for Christmas sales has led to 20% fall in 5 of John Lewis stores last week.

According to the group’s weekly trading update, the drop at Nottingham was 23% while outlets at Reading, Bristol’s Cribbs Causeway, Peterborough and Peter Jones in London reported 20% fall on a year earlier. Read the rest of this entry »

The giant rivals on the high street intensified their price war for the Christmas sale. J Sainsbury, John Lewis and Tesco were quick to lure customers by passing them on cut in VAT announced by the Government.

Realising that retailers are determined to lower prices and attract more customers, Tesco decided to cut prices of 1,000 items by up to 50%. Read the rest of this entry »

Woolworths’ biggest shareholder is vehemently opposing putting the struggling group into administration and is determined to derail plans of selling 800 shops at a nominal price. Ardeshir Naghshineh, the Iranian property tycoon, who has over 10% stake in the business, argued that offloading stores to restructuring specialist Hilco for a meagre £1 is highly detrimental to the interests of either staff or shareholders. He wants the group to look for other options.

Ardeshir held discussions with Woolworth’s bankers GMAC and Burdale on the sale of some of the group’s leases to create cash flow for short term before Christmas. He said that Woolworths’ balance sheet was quite strong and its high street retail division enjoyed a unique position with well recognised and sought after brands.

Ardisher claimed that banks were having open mind on his proposal and were ready to discuss further by involving company. He added that it was the first time that banks were presented with an alternative business plan and they showed readiness to listen.

Hilco was holding discussions since last week over a deal under which Woolworths would sell off its shops while trading by the group’s publishing and distribution businesses would continue. The deal would cover £286m debts, £160m in annual rents and £58m pension deficit.

Though people have not got to December yet, sales have already begun, signalling fierce competition for market share. Retailers are getting ready to face cut-price battles rather than big profits this Christmas.
Instead of seeing bauble-laden Christmas trees, shoppers were happy to see banners of mega sale offers out of stores windows. Though Christmas is yet many days away, retailers have gone into discount mode. Shoppers might get relief for Christmas shopping, but the investors are getting more worried about slim pickings.

At Westfield, except Next, all three ‘anchor stores’ House of Fraser, Debenhams and Marks & Spencer were running promotions. Next chief executive Simon Wolsfon claimed that Next had never discounted before Christmas and this stand meant that customers could trust their prices.

But the cash strapped customers are least concerned about retailers’ price integrity. At Westfield they thronged in large numbers. Many shoppers acknowledged that they were buying more because of 20% discounts.

Annual Christmas survey by Deloitte indicates that 25% of UK shoppers plan to spend less this year but the retailers are trying to attract them with early discount offers. Around 50% of those surveyed would be spending the same amount as last year.

According to Neil Saunders, director at Verdict, discounts were good news for shoppers but very bad news for retailers’ margins. John Lewis’s selling operations director, Dan Knowles, commented that it was great way to cut margins and attract customers into stores.

Department stores sales of John Lewis Partnership fell 9.8% as the retailer passed through another tough week due to judicious spending of the retail shoppers.

Sales may have been affected by the earlier commencement of half-term holidays, but John Lewis believed that customers were budgeting their spending very judiciously amid economic downturn.

John Lewis home sales fell by 17.3% while home technology and electricals were down by 9.6%. Decline in fashion sales was 1.3%. Sales in Milton Keynes stores were down by 25.7%, Southampton registered 21.7 decline, Watford sales fell by 21.6% while Cribbs Causeway in Bristol was off 20.3%.

According to retail analyst Freddie George at Seymour Pierce, sales figures were disappointing probably due to discount offers by competitors and early half-term holidays.

Sales update caused Next shares to fall 5% while Marks & Spencer shares came down by 3%.

Andy Street, managing director of John Lewis, claimed that comparison of results with those of competitors proved company was outperforming in very challenging market. He credited success to the work done on shop-keeping, assortment and goods availability. He commented that there would still be winners on this Christmas and John Lewis was sure of being one among them.

Kingfisher, the biggest home improvement retailer in Europe, is pessimistic about growth in the UK market next year, but is confident of capturing market share from rivals.

Ian Cheshire, Chief executive of the Kingfisher group which runs B&Q in Britain, welcomed cuts in the UK interest rates and sharp fall in oil prices, but believed that their impact on improvements in consumer confidence and spending would take quite long.

Ian added that Kingfisher was not planning any growth in next 12 months since business prospects during this period were very dim due to tough conditions.

The UK’s do-it-yourself market was in bad shape since 2005 and deteriorated sharply in 2008 due to housing market slide and recession fears.

Kingfisher rivals Travis Perkins and Home Retail have hinted that full-year profits were likely to be hit and may touch bottom of analyst’s forecast.

Kingfisher’s UK sales accounted for 47% of £9.36bn last year. It was shielded from loss by growth in Eastern Europe and French business which performed better.

Ian Cheshire claimed that Kingfisher had big opportunity to exploit weakness of UK rivals Floors-2-Go and MFI who had started closing stores. He was expecting more trouble for independent rivals this year, who commanded 25% of tiling and kitchen markets.