1 It's never as bad as feared
As sure as Daily Mail stories about local councils banning Christmas lights, the national media will always be full of scare stories about retailers experiencing the worst Christmas since the Black Death in the run-up to the big day.
Shoppers undoubtedly left it late, at least partly in the knowledge that retailers would drop their prices as Christmas drew near. But they did come out and claims that Richard Ratner’s infamous “worst Christmas in 25 years” prediction was merely a year early were wide of the mark.
2 Entertainment retail lives on
Weren’t we all supposed to be buying entertainment from the internet or Tesco by now? It was a remarkable Christmas for the entertainment retailers, driven by the phenomenal performance of the games sector.
Game has topped the OC&C index for three years running now, but the much-maligned pair of HMV and Zavvi also produced powerful performances, with DVD making up for weak music sales.
What they showed is that there will always be a place for entertainment retailers with range and authority.
3 Morrisons is back
It was a good Christmas for all the supermarkets, but Morrisons stole the show with a stunning like-for-like performance.
The Bradford-based grocer put the misery of the Safeway integration behind it once and for all, winning new shoppers and tempting old ones back with an ad campaign that breathed life into the brand.
But it wasn’t just about the marketing. A renewed focus on Morrisons’ traditional strength of fresh produce paid dividends and its engaging new chief executive Marc Bolland has invigorated the business.
4 The future is multichannel
An obvious one this, but Christmas showed that there’s no sign of the explosion in multichannel retailing reaching a plateau.
Pure-play e-tailers continued their meteoric growth, albeit from a small base. But more significant was the role of the web for established high street names, which are finally exploiting the strength of their brands online and becoming genuine multichannel businesses. Cracking fulfilment remains the biggest challenge.
But it’s not just about the web. Traditional home shopping is enjoying a remarkable renaissance, with the deeply unfashionable but consistently successful N Brown leading the way.
5 The M&S recovery has run out of steam
It was a big ask to expect the momentum of the Marks & Spencer recovery to continue through Christmas, but with the benefit of virtually all the trading statements being out, Sir Stuart Rose’s attempts to blame the economy for its underperformance don’t quite hold water.
There’s no doubt that the problems that have held back fashion retailers have affected M&S – as the UK’s biggest fashion retailer, it would be extraordinary if they didn’t – but the like-for-like fall still surprised the City.
Many observers are particularly concerned about M&S’s food business, given that every other significant food retailer managed a healthy like-for-like rise.
6 Good specialists are still thriving
While the supermarket onslaught into specialist markets continues apace, there are plenty of businesses that are surviving and prospering by sticking to what they do best.
In addition to the entertainment retailers, specialists from Dreams to Pets at Home managed to increase like-for-likes by knowing their markets, offering quality service and real authority in their products.
It’s hard though – even perennial outperformer Majestic Wine was hurt by the supermarkets discounting on booze, while undifferentiated furniture specialists are being crucified as highly indebted shoppers pull back from spending on big-ticket items.
7 Don't believe the City
There were red faces among City analysts time and again throughout the trading update season, as forecasts of the winners and losers often proved inaccurate.
M&S, believed to be a winner, turned in a poor result, while Sainsbury’s and Debenhams confounded those who thought they’d be losers to emerge among the success stories.
Of greater significance to the sector was the brutal hammering given to share prices, particularly after M&S’s statement. Rose’s outlook was gloomy, but did that really mean the company was worth less than the 400p a share that Philip Green was going to bid in 2004?
8 Fashion was a bloodbath
2007 was a year to forget for fashion retailers and things got worse as the year went on. The awful summer weather started the downward trend but, throughout the rest of the year, the weather was out of kilter with the seasons.
As growing consumer caution kicked in, shoppers reined in spending and fashion retailers from New Look to Next experienced modest like-for-like declines.
The suspicion is that many privately owned retailers, particularly the smaller value players, are having a much worse time. The mass-market footwear specialists are another category of retailer really feeling the pinch.
9 Don't write off department stores
John Lewis always seems to do well and achieved impressive festive growth of 6.2 per cent. But there were encouraging signs at Christmas that the other two giants of the department store sector are turning a corner.
With like-for-like growth of 2.4 per cent and 2.2 per cent respectively, House of Fraser and Debenhams showed the first signs that investment in stores and product is beginning to bear fruit after some painful adjustment. Upmarket department stores such as Selfridges also continued to outperform.
10 Hard times lie ahead
Christmas may not have been as bad as feared, but the noises coming from the chief executives were cautionary.
Economic volatility and huge falls in the global stock markets have become almost a fact of life and those retailers that are heavily reliant on January Sale trading have been putting out gloomy noises.
There will be more casualties ahead, and it will take more than the one pre-Christmas interest rate cut to restore consumer confidence.
Season of highs and lows
It was a good Christmas for...
Game, which topped the index for the third year running and received Competition Commission approval for its acquisition of Gamestation
N Brown, which was one of many internet and catalogue players to enjoy a happy Christmas as consumers increasingly shopped from home
HMV and Zavvi, achieving 14 per cent and 10 per cent like-for-like sales growth respectively, as strong games growth more than compensated for weak music demand
Morrisons, which, with the help of Lulu and Alan Hansen’s starring roles in its TV ads, delivered the highest like-for-like growth among the supermarkets (9.5 per cent). Somerfield, with 6.7 per cent growth, also fared well
Department stores, with all the major players in positive like-for-like sales territory and John Lewis leading the pack on 6.2 per cent
Bargain hunters, who scooped up deals before and after the festive period as retailers discounted heavily to support sales volumes
It was a bad Christmas for...
Land of Leather and ScS Upholstery, which both suffered double-digit like-for-like sales declines as people stayed on their sofas at home rather than venturing out to buy new ones
Investors, as the City pummelled retailer’s share prices at the slightest sign of soft festive trading. Tesco and Marks & Spencer were among the big names hit
PC World, which failed to cash in on the e-tail boom. Consumers weren’t buying new computers to use for online shopping and poor laptop sales contributed to a 10 per cent like-for-like sales decline
Optimists – with the credit crunch, a consumer spending slowdown and weak housing market high on the agenda, retailers will be hoping for more positive sentiment in Christmas 2008
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