Infographic: Retail's winners and losers over Christmas

Christmas was, as ever, a different experience for each retailer, and it can be hard to predict the winners and losers. But a couple of years ago, few would have expected Game to top any growth tables.

The retailer had a difficult few years previously, when there were no big product releases and online players stole market share. In March 2012 it collapsed into administration before OpCapita purchased 333 stores in April.

But over Christmas 2013 it was by far and away the biggest growth story - store growth was up 90% and online rose 213%.

Tom Gladstone, a partner at OC&C Strategy Consultants, says Game did well to capitalise on two big launches in 2013 - the XBox and PlayStation consoles in November gave the retailer an opportunity. “The story is more generally about the wider video games market,” he says.

Its loyalty scheme has helped hook shoppers in, and Game worked hard with key suppliers to get good deals, Gladstone says. It has also done well to create a name for itself as being “by gamers, for gamers”, he adds.

At a premium

The success of the premium mass market is another clear theme. “Those who have a strong, clear, niche proposition that really resonates are doing quite well,” says Gladstone. “Many of these have been exploiting the fact that multichannel allows more of a targeted proposition to reach customers that they never used to reach that well.” Joules, Jigsaw and Fortnum & Mason all feature high on the table.

He adds this trend has been accelerated recently as the premium category has gone from strength to strength. “It has been apparent for a while but it has emerged a little stronger this Christmas than it has in previous years.”

A couple of factors have helped premium retailers. “Some customers are finally starting to see economic recovery and some are prepared to spend a little more on the things that really matter to them even while they are still saving elsewhere,” Gladstone says. “After four or five years of austerity people are finding ways of making room for little luxuries.”

Jaeger chief executive Colin Henry said he was “satisfied” by his results. Store like-for-likes were up 10%. “It is broadly in line with what we expected and actually slightly better because online sales were a touch higher as the customer left shopping until the last minute,” he said in his update.

He added that click-and-collect had boosted the online performance and comprised 25% of online sales, while sales via mobile devices almost doubled against the previous year. Indeed, the growth of the mobile channel has been a continuing story for all the retailers on this year’s table.

Food for thought

The final theme that emerges from the Christmas table is the difficult year the grocers are going to have. Aldi and Lidl are putting the big four under huge pressure, and Gladstone says: “Even Sainsbury’s, who are doing all things right, still found life pretty difficult. Grocery has always been tough but it is a very difficult market.”

Sainsbury’s likes-for-likes edged up 0.2%, while Tesco’s store like-for-likes fell 2.4%. Online, Tesco’s growth was a relatively modest 14%, less than the BRC average of 19.2%.

Morrisons is at the bottom of the league table, after like-for-likes fell 5.6%. Chief executive Dalton Philips said earlier this month the performance was “disappointing” and blamed Morrisons’ lack of presence in convenience and online. Both of these operations are being ramped up this year.

Gladstone says: “It has been a tough market this year. The grocers have had a stream of low food inflation, with prices remaining very flat, and there is the continuing gain of Aldi and Lidl.”

He observes that 50% of the population now shop at one of the two German discounters, making things difficult for the big four. In addition, there has been relatively little market growth to go around. “The battle has been the most intense for the grocery basket it has been for many years,” he says.

There is not much sign of a let-up in the coming months. “It will be quite a long road. But in the medium term Aldi and Lidl will continue to open new stores and that will create more pressure in the market,” Gladstone says.

In addition, Tesco’s ongoing recovery programme will make the market even more competitive. “There’s no sign of a let-up in the near term,” believes Gladstone.

The grocery chief executives agree. Sainsbury’s boss Justin King said when results were revealed: “You always believe that the last Christmas was the toughest ever, but it seems like this one really was. If you take all of the market information and the quarter as a whole, then the overall market is flat or in slight decline. This is the first time that has happened in my 30 years of retailing.”

The industry is changing quickly at the moment and no doubt the picture for Christmas 2014 will morph once more. Market share for every business will be hard won.