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Within just minutes of the third England-wide lockdown being announced last night, the UK’s online supermarket shopping sites were buckling under the strain as a virtual stampede saw slots being snapped up in seconds.
Our erstwhile nation of shopkeepers has seemingly morphed into a nation of online panic-buyers. And the supermarkets, at least, will be rubbing their hands with glee, yet again.
According to market research firm Kantar, British supermarkets had their busiest month on record in December, with shoppers spending £11.7 billion on groceries over the Christmas period.
Already peak season for the supermarkets, this December just hit new highs. The £4 billion or so spent over the festive season in a ‘normal’ year - when spending at restaurants, pubs and bars also booms - has been boosted to £11.7 billion as supermarkets cashed in on the lack of alternatives for consumers.
And to cap it all, this year there was also Brexit stockpiling to throw into the mix. Kantar said the protracted Brexit negotiations and visions of lorries stuck at ports prompted shoppers to get their supplies in early, with 15 million households hitting the shops for their big festive spend, making 21 December the busiest day of the year.
Morrisons noted the same trend when it posted a trading update this morning. Overall sales were up by 9.3% in the three weeks to 3 January, when compared to the same period last year. In the nine weeks to 3 January, like-for-like sales were up 8.5% when new shops and fuel sales were taken out. And in the six months to the same date they were 8.1% higher than the same period a year ago. Online sales were noted as having been very strong. Now in the fourth quarter of its financial year, online sales have tripled across all channels.
And this shift to online sales is not unique to the supermarket sector. Early signs are that all retailers who have maintained or boosted their online sales capacity will have seen decent trading over the festive season.
UK retailer Next, also giving an update today, saw a 36% jump in online sales in the nine weeks to Boxing Day, compared to a year ago. That was very much needed to offset the 43% fall in in-store sales.
And it is this fall in in-store sales that could weigh heavily on the entire high street, now that a third England lockdown will force the closure of all non-essential retailers, nationwide, yet again.
However, the new lockdowns in England will see 90% of its stores closed. Next's full-year profit before tax is expected to be £342 million after accounting for better sales in November and December and anticipated losses from store closures in January, according to its trading update.
Next’s overall sales are 1.1% lower as a result of the forced store closures to date. Its 52-week profits before tax would have been £370 million, but a non-recurring profit of £12 million from a 53rd week, along with an additional property cost of £40 million will reduce profits, meaning the total full year profit before tax is forecast to be £342 million. Previous guidance given in October said full-year profits would be £365 million.
Expect more of the same as we get a flurry of Christmas trading updates from the retail sector in the days and weeks ahead.
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