Aldi reports record Christmas sales

Discount supermarket Aldi has reported record Christmas trading after a 15% rise in December sales.

The firm said there was strong demand for its premium product range, launched to compete with higher-end retailers such as Waitrose and Marks and Spencer

Aldi does not publish like-for-like figures, which exclude sales from new stores, but last year it opened 70 new outlets, an 11% increase.

The big four supermarkets will all give their trading updates this week.

Morrisons will report on Tuesday, with Marks and Spencer, Tesco and Sainsbury’s following on.

Aldi plans to open another 70 stores across the UK this year, with its 700th due to open in February.

The supermarket added that it predicted profit from its “Specially Selected” lines would exceed £750m in 2017.

First impressions

Matt Walton, analyst at Verdict Research, said: “Early indications are that the value players were Christmas 2016’s big winners, with shoppers already bracing themselves for the challenging economic conditions ahead.

“With a continued focus on price and improving value perceptions, Aldi is well placed to maintain its momentum into 2017,” he said, adding that planned store refurbishments would help create “a stronger first impression for new customers”.

Last week, Next supplied a shock to the retail sector when it reported a disappointing Christmas trading period and warned that conditions would continue to be difficult this year.

Next shares lost almost 20% in two days, and the warning also hit shares in Marks and Spencer and Debenhams.

Analysts think that Marks and Spencer, which publishes its trading update on Thursday, can hardly fail to improve on 2015’s Christmas trading, when sales at its non-food business fell almost 6%.

Andrew Wade, from Numis Securities, thinks that M&S could report sales growth in clothing and homewares of 1%.

“M&S performed so poorly in clothing and homewares through the third quarter last year, we see a good possibility that the division reports a small positive LFL [like-for-like] outcome this time,” he said.

Morrisons releases its figures for the Christmas period on Tuesday, followed by Tesco on Thursday.

Analysts are expecting both of those supermarkets to report growth in like-for-like sales of about 1% for the Christmas trading period.

Christmas markets

Earlier, a report from payment card company Visa suggested that the final three months of last year saw the strongest quarterly growth in consumer spending in two years.

Its research, which reflects cash and card spending, showed expenditure rising at an annual rate of 2.8% in the fourth quarter, the quickest quarterly growth rate since the end of 2014.

For December, Visa’s report showed overall spending increasing at an annual rate of 2.6%, with shops recording a modest 0.7% growth rate, but online spending growth rising by 5.5%.

Of all the categories measured, hotels, restaurants and bars saw the strongest expenditure growth, up 7.3%.

“Growth was once again led by the experience sector, with consumers going to Christmas markets, travelling to visit loved ones, or venturing to various parts of the country to celebrate,” said Kevin Jenkins, UK and Ireland managing director at Visa.

[Source:- BBC]