Mixed festive trading for Britain's snow-hit stores
Top British retailers reported on Wednesday mixed trading figures for the recent festive season when much of the country was hit by heavy snowfall and freezing temperatures.
Entertainment chain HMV issued a profits warnings and said it planned to close 60 stores after announcing that sales in Britain and Ireland had slumped by 13.6 percent in the five weeks to January 1.
The group acknowledged that its sales had been "significantly undermined" by the weather, while fashion retailer Next said it had suffered about 22 million pounds (26 million euros, 34 million dollars) in lost sales because of the snow.
Bucking the trend, department store John Lewis revealed a 7.6-percent rise in festive sales as stranded shoppers keen on its items simply made their orders online.
Howard Archer, chief European economist at research group IHS Global Insight, described the John Lewis figures as "an extremely impressive performance given the severe disruption to shopping activity caused by two bouts of severe weather in December.
"It would be nice to take this as a sign that overall retail activity held up well over December but the evidence so far indicates that John Lewis was very much an out-performer."
He added: "Consumer confidence is currently low while the substantial fiscal squeeze will increasingly hit public sector jobs and consumers' pockets, starting with this week's VAT hike."
Britain's standard rate of sales tax, or VAT, was increased to 20 percent on Tuesday in one of several government moves to slash a record public deficit, but the opposition said it would hit the poorest hardest.
Finance minister George Osborne insisted that the rise from 17.5 percent was a "reasonable" step towards economic recovery and would raise 13 billion pounds a year.
On Wednesday, HMV forecast annual profits at the low end of market expectations.
"The challenging entertainment markets, combined with the severe weather over our peak trading period have had a negative impact on our trading year to date," said the seller of CDs, DVDs and computer games.
"In addition, there are well-reported consumer headwinds as we enter 2011."
Next meanwhile said that its sales "were significantly affected by extreme weather conditions and increased competitor discounting on the high street before Christmas".
It added: "The outlook for 2011 is uncertain. The impact of government cuts on consumer spending is still unclear and we have yet to fully understand the impact of rising retail selling prices on overall demand.
"We reconfirm that our own prices will be increasing by circa 8.0 percent as a result of higher input costs and the rise in VAT.
"Our best guess is that price rises will moderately suppress like-for-like sales."
© 2011 AFP