Richard Hyman, strategic adviser and founder, Richard Talks Retail

Winner: Home Bargains

Home Bargains is an under-the-radar business that keeps delivering outstanding performance year in, year out. It is privately owned with no debt. In other words, it can please itself with no external corporate distractions.

It has much of the country still to go for, so has a vigorous store openings programme. It understands exactly who it is targeting, what they want and is structured to deliver. It consistently meets and exceeds customer expectations – a compelling virtuous circle. With no distractions, Home Bargains will continue to capture market share in the supermarket sector and beyond.

Loser: Debenhams

Debenhams’ survival in 2019 is symbolic of today’s retail market. In the real world, this is a business unfit for purpose, not viable on almost any measure.

However, today’s world has so many life-support options that kick the can down the road. In Debenhams’ case, it has gone for a CVA with creditors taking ownership and having done so, choosing to put a bit more money in rather than accepting the inevitable. They need a serious uptick in trading to avoid having to put lots more money in. That invisibility will just keep coming back.

Bryan Roberts, global insights director, TCC Global

Winner: The Co-op

In grocery, a simple answer would be that the winners will be the discounters and the losers are everyone else. For a more nuanced point of view, beyond the discounter’s space-driven progression, I’d shout out The Co-op as the business most likely to build on its already impressive showing in 2019.

Further physical expansion together with ongoing range improvements will see it achieve another year of unbroken growth.

Loser: Waitrose

There won’t be any massive losers, but I do worry a little about Waitrose. Stores I’ve been in have been noticeably quieter than in previous years and both the range and availability seem to be a little off. Could be a tough year as the competition hots up in the south.

Julie Palmer, partner, Begbies Traynor

Winner: Greggs

In 2020, ethically minded, sustainable brands will only get bigger as consumers seek to buy from those that share their values. Food retailers, such as Greggs, which are willing to innovate with new affordable products to appeal to a thriving wave of vegan culture.

Loser: Waitrose

It also looks to be a bad year for some major supermarkets that are not adapting to the changing marketplace and responding to their discount rivals. With Marks & Spencer sharpening its attack in food retail and driving increased spend levels per customer, Waitrose needs to be wary. M&S’ online push, through its partnership with Ocado, could hit the John Lewis-owned supermarket hard.

Greg Lawless, retail analyst, Shore Capital

 

Winner: The Works

The Works had what can only be described as a difficult year in 2019 with a profit warning in early November due to the lack of ‘mega’ toy craze, like the slime and squidgy foam toys that stormed the market in 2018.

However, I expect the retailer to have made the most of the Frozen 2 phenomenon during peak.

The discounter is one of the few that is growing its store footprint, taking advantage of the dislocation in the property market to negotiate rent reductions with landlords. It has been opening net 50 stores per annum and expanding into well-located small units.

The Works has many self-help levers to grow the business including in-store click and collect, a loyalty scheme with 1.8 million cardholders and a growing schools supply segment. We think that the company is one to watch in 2020 and has the potential to re-rate significantly from its current share price level of 29p.

Loser: Debenhams 

In complete contrast, Debenhams remains in intensive care.

The company isn’t taking its medicine quickly enough. Our store visits in recent weeks suggest it has been a laggard this Christmas with mountains of knitwear, coats and beauty gift sets still to sell.

The stores remain over-spaced and it has no retail leader in the business taking the commercial decisions to turn seasonal stock into cash in peak trading. In the autumn, the company turned cap in hand back to its debt holders for a £50m cash injection and we fear that history may well repeat itself, like JJB Sports, which limped on bravely until the ATM ran out of money.

The warnings signs are there for Debenhams and current trading looks to be challenging, at best. Our prognosis is that it could be terminal given the failure to convert seasonal stock into cash. One to watch closely and it will be a bumpy ride for staff, suppliers and consumers, we fear.

George MacDonald, executive editor, Retail Week

 

Winner: Hotel Chocolat

Hotel Chocolat manages successfully to sell not just products but a feel-good factor. The high product quality itself creates feelings of pleasure and indulgence but the stores are also fun places to be, offering experiences such as tastings. It’s a winning combination for any bricks-and-mortar retailer seeking a share of discretionary spend.

Hotel Chocolat is also exploiting the blurring boundaries between dining and food shopping through its restaurants and cafes, which has stretched its core product in imaginative ways to provide savoury as well as sweet treats.

The retailer also reflects the spirit of the age with an ethical worldview that seems to permeate its operations, such as how it deals with the farmers who supply it.

It is a combination that has served Hotel Chocolat well so far and whose appeal is unlikely to diminish.

Loser: Kingfisher

B&Q has been through a difficult period and putting the DIY giant back on track is likely to take a while.

The new boss of parent Kingfisher Thierry Garnier said last November, not long after taking up his post, that the business had been held back by “organisational complexity”.

In those circumstances, alongside tough market conditions, 2020 is unlikely to be a vintage year as the retailer adjusts.

Garnier said then: “We are trying to do too much at once with multiple large-scale initiatives running in parallel. Altogether, this has brought disruption to sales and has distracted the business from focusing on customers.”

Addressing such issues will take longer than a year.

Allyson Stewart-Allen, chief executive, International Marketing Partners

Winner: Aldi

Aldi knows what its brand is about and what its customers seek, which is why it yet again outshined its competitors in 2019. In uncertain times, those promising certainty are destined to succeed.

Loser: House of Fraser 

In a year promising yet more uncertainty for UK consumers – not least thanks to Brexit, US economic and military events, and EU trade agreements yet to be forged – it is likely House of Fraser will be one of the casualties given its confusing market position. Being neither ‘high end’ nor ‘everyday low prices’ places it in a retail no man’s land. 

Luke Tugby, deputy editor, Retail Week

 

 

Winner: Asos

Following a turbulent 2019, expect Asos to rediscover its form in 2020.

Although boss Nick Beighton warned in October that the business has a lot of work to do, the teething issues experienced in its US warehouse have been ironed out – and should reflect positively in its sales and profit performance.

The etailer has also made a clutch of new hires, including chief growth officer Robert Birge, to take some of the weight off Beighton’s shoulders.

Analysts at Peel Hunt have singled out Asos as one of its top growth stocks for 2020. The etailer looks better placed at the start of the new year to deliver on that prophecy.

Loser: Naked Wines

Naked Wines is betting big on the US – and that gamble is anything but a dead cert.

Selling off a well-established, profitable business in the shape of Majestic Wine to fund its US ambitions could prove a huge mistake. In doing so, the group has lost the safety net of £300m in annual UK sales if its bid to crack America falls flat. In such a competitive and fast-growing market across the pond, top-line growth won’t guarantee success.

Following the departure of Naked’s enigmatic founder Rowan Gormley, new boss Nick Devlin and chair John Walden have a huge task at hand if they are to be popping any corks this time next year.

Nick Bubb, independent analyst

 

Winner: Frasers Group

The fourth quarter of last year saw an amazing shares re-rating for Sports Direct, now named Frasers Group, as fears eased about the state of House of Fraser and the relentless share buyback squeezed out the bears (increasing Mike Ashley’s stake even further), but even so, there could be a lot more upside to come, with the bulls targeting the levels that once saw the group in the FTSE 100 index.

Loser: Tapi Carpets

Poor old Carpetright was nearly brought to its knees in 2019 before the rescue deal agreed with the poker-playing boss of the Meditor hedge fund. Meditor is clearly gambling that they can drive loss-making rival Tapi out of business by supporting Carpetright and that the carpet market isn’t big enough for both chains to survive.

Lisa Byfield-Green, head of insight, Retail Week

 

Winner: The Co-op Food

As the big-four grocers cling to the middle ground and the discounters continue their relentless focus on expansion, there is one food retailer that is quietly delivering on convenience, innovation and conscious consumption.

The Co-op has reinvented itself, yet remains loyal to its underlying values. Its new-concept, small stores in high-traffic locations, with its food-to-go focus and a solid assortment of vegan and free-from foods are convenient and pleasant places to shop. Wholesale partnerships and initiatives such as pop-ups at festivals have also expanded the Co-op’s reach and delivered additional growth.

Ecommerce is another opportunity. It might be a late entrant, but The Co-op has been thinking outside of the box for ways to bring together online and convenience. Its partnerships with Deliveroo and Starship Technologies demonstrate an innovative and collaborative approach, which will continue in 2020 as it targets same-day delivery from 650 stores.

Loser: Frasers Group

Frasers Group, the retailer formerly known as Sports Direct, continued to add more struggling brands such as Jack Wills and Game to its enormous empire last year. On the one hand that creates a huge, diversified powerhouse where synergies can be leveraged. Yet on the other, it creates a group of disparate and struggling businesses that will become increasingly difficult to manage.

The group has felt the sting from some of its misplaced investments, most recently culminating in serious losses from both House of Fraser and Debenhams as well as a huge Belgian tax bill.

Having rebranded as Frasers Group, the retailer is following an ‘elevation’ strategy; however, it remains to be seen how many department stores will be converted to the more upmarket Frasers format and even how many will remain open. Could 2020 be the year when Mike Ashley’s house of cards begins to topple?