The Christmas POS is down (mostly) and Valentine’s day merchandise and Easter eggs are on the shelves. The peak weeks are over for another year but how did the grocers do? We won’t know for sure until the trading statements are issued over this week and next, but city forecasts are not favourable on the whole.
Waitrose we already know pulled in a 2.8% like for like sales increase for the Christmas trading period, boosted by excellent online grocery orders despite a headline grabbing moment when delivery slots disappeared. The investment in brand and fulfilment has paid off and as a long term strategy will continue to benefit Waitrose as it trades through 2015.
We have seen that Lidl sold more champagne over Christmas than it did semi skimmed milk. Safe to say the advertising and the social media campaign #lidlsurprises, which will carry it through the year, is a winner. We expect that Lidl will start to close in on Aldi and could take the lead as the largest discount supermarket.
Meanwhile Tesco have dipped a toe into the discount playing field with a trial in three of the Tesco owned One Stop convenience stores. How, or if, this will fit into Dave Lewis’ plans will become clearer on Thursday with the release of its trading figures and a city announcement later in the day. Christmas sales will show a like for like decline but could be better than have been recently bolstered by Lewis’s tactical price cuts and staffing increases. The main message for Tesco when it reports won’t be how it traded but how it will trade in 2015 and what it will do about the long list of issues it faces, not least of which its redundant space.
Sainsburys are also expected to report a decline in like for like sales and with no significant investment in Black Friday won’t have changed its fortunes. 2015 for Sainsburys must be about rebasing its strategy and building on its brand values. The focus on Netto and competing with the discounters has caused a drift in strategy to the detriment of the brand and sales but by the same measure, so has complacency. A wake up call is overdue.
Morrisons will release its Christmas trading report next week but that could be the bigger story of Christmas 2014. Forecasts suggest it may have turned a corner; nothing as exciting as a sales gain but certainly a lesser decline than it has experienced of late. Watch this space.
Christmas wasn’t a winner for the majority but the grocers with the clearest strategic direction and best execution in store will have faired the best; the retailers that have been struggling, have continued to struggle.
The only guarantee for 2015 in the grocery sector is that it will be brutal and those in senior roles shouldn’t take anything for granted.
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