Heavy discounting ahead of Christmas helped Debenhams record its highest ever December sales
Heavy discounting ahead of Christmas helped Debenhams record its highest ever December sales.
Like-for-like sales in the five weeks to 5 January jumped 5%, but at the cost of some profit. The company said: “The UK high street was more promotional than the prior year, with customers looking for bargains ahead of Christmas as well as in the traditional sale period. We traded the business accordingly which meant some increase in our own promotional activity in the run-up to Christmas.”
As a result, it expects profit margins for the year to be just 0.1% higher than last year, rather than the 0.2% growth it was previously targeting. Chief executive Michael Sharp said the retail envrironment was “extremely challenging”.
Online sales continued to grow, up by almost 40% in the 18 weeks to 5 January, driving group like-for-like sales 2.9% higher over the same period. Online sales now account for almost 13% of Debenhams’ turnover.
That fits with figures from the British Retail Consortium on Tuesday showing it was an online Christmas. The BRC noted that across the market online retail sales were up 18% in December.
Sharp said the retail climate market will remain difficult in 2013. “We continue to believe that whilst consumers have become acclimatised to the new economic reality, we don’t anticipate a significant change in consumer confidence in the remainder of the year.”