December

IN THE NEWS

Sainsbury’s, Asda and some dairy processors agreed to pay combined fines of more than£116 million after admitting involvement in fixing milk and cheese prices.

Sports Direct issued disastrous interims, with a 35 per cent plunge in underlying pre-tax profits to£52 million and a 7 per cent fall in total sales. Founder Mike Ashley refuses to rule out making himself chairman.

Retail Week revealed that former Topshop brand director Jane Shepherdson would be joining Whistles to run the brand, as it emerged that it is likely to be split off from Baugur-owned Mosaic.

Tesco opened its first Fresh & Easy Neighborhood Market in the city of Hemet, outside Los Angeles. In the same week, it opened five more stores in southern California, followed by Las Vegas and Phoenix.

Christmas spending started poorly and everyone is expecting it to be tough. With the exception of the big grocers, many retailers reported weak trading on the first weekend in December.

Argos was hit by strikes at its Republic of Ireland division as staff pursued higher pay.

Tim Mason said he will not succeed Sir Terry Leahy as chief executive of Tesco, ending years of speculation. Mason, who is chief executive of the grocer’s US operation, said the role will go to a younger candidate.

Finnish homewares retailer Iittala signed a deal to open its first UK store on Regent Street, opposite Habitat and Zara Home.

Allan Leighton announced he was leaving his role as chairman of Sir Philip Green’s Bhs chain, bringing down the curtain on one of the most high-profile business relationships of the past five years.

Tesco is to join retailers such as PC World and Carphone Warehouse in the digital battle by acquiring computer support company PC Guys in order to launch its own technology brand and support service.

Baugur was expected to launch a bid for Debenhams in partnership with an overseas department store business early next year.

Ikea cut queues at its checkouts by implementing an employee scheduling application. The software is intended to help the retailer better match staffing levels to store trading patterns.

STORE OF THE MONTH

Reiss, Barrett Street, London
Finally, for those with a taste for something rather more upmarket, Reiss opened its flagship on Barrett Street.

As is the case in January, not much happens on the store-opening front in December, as retailers steady themselves for the long-awaited Christmas rush. This one opened in November, but its facade alone earns it its place in the round-up.

The frontage was created using edge-lit acrylic that makes a beacon of the building. Within, the raw concrete pillars encased by glass display cases and the triple-height ground floor made it feel a lot more expensive than the prices on show indicated.

“Affordable luxury”, as chief executive David Reiss called it, seems a good way to end the year.

ON THE MOVE

Former Tesco operations director John Browett began his role as DSGi chief executive.

Morrisons poached Asda head of brand product Simon Mitchell and central European product development manager Eleanor Scott to become joint heads of product development to improve its own-brand offer.

HMV poached Zavvi divisional manager Jason Toy to become head of central operations at the entertainment group.

Stephen Robertson, former B&Q and Woolworths marketing director, was named director-general of the British Retail Consortium, replacing Kevin Hawkins.

A festive let-down in store?

Even the chirpiest of retail chief executives is likely to be feeling disconsolate in the run-up to this Christmas. The background economic picture is more fragile than it has been for years – house prices are supposedly falling and one recent interest rate decrease is not going to do much to boost consumers’ bank balances after five increases.

A dire weekend of trading on the supposedly most fruitful first weekend in December led many – particularly those in fashion – to expect the worst. Analysts are generally convinced that the pattern will be one of consumers trading down this Christmas and a profit warning from Moss Bros only added to the pessimism.

And yet there has been positive news for some. Asos continues to power ahead and Tesco unveiled another crunch-defying set of figures. John Lewis registered its biggest weekly sales to date, with a year-on-year increase of 7.7 per cent to more than£101 million for the week ending December 15.

Online retailers have been faring well. On Monday December 10, they experienced one of their most lucrative 60 seconds when at 1.09pm more than£750,000 was spent in one minute as office workers bought their Christmas presents on their lunch break.

Some retailers have written off this year completely and are banking on the new year Sales to repair some of the damage. This is not blind faith; in previous years January trading has come to the rescue of many a business, so there are glimmers of hope.

And while there will undoubtedly be casualties of a difficult Christmas – as there are every year – consumers will still spend. Ultimately, those retailers that have a differentiated offer and provide a stress-free shopping experience are likely to be the ones cracking open the champagne in the new year.

Nevertheless, many could be forgiven for wondering whether Seymour Pierce analyst Richard Ratner was 12 months premature with his statement that last year’s Christmas would be the worst for 25 years.