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By Paul Sandle and James Davey
LONDON, Jan 9 (Reuters) - A Christmas crunch caused more
pain for British retailers on Thursday, with John Lewis flagging
lower profits for 2019 financial year and warning its staff they
may not get a bonus for the first time since 1953 as consumer
shopping habits shift.
Tesco, Britain's biggest retailer, ground out a
0.1% rise in underlying UK sales during a "subdued" Christmas,
while Marks & Spencer said it was held back by waste in
its food business and weak sales of menswear and
gifts.
Industry data showed British supermarkets, including
Sainsbury's, Walmart-owned Asda and Morrisons
, recorded the lowest sales growth over the crucial
Christmas trading period for five years.
British shoppers turned cautious in 2019 as wage growth
slowed and uncertainty over Brexit gripped the country.
But Tesco said Prime Minister Boris Johnson's resounding
election victory in December, which broke the deadlock over
leaving the European Union, had not released any pent-up demand.
The prospect of employee-owned John Lewis Partnership, which
runs the eponymous department stores business and up-market
supermarket Waitrose, not paying a bonus for the first time
since 1953 underlined how tough times are for some retailers.
Like rival department stores, John Lewis has been under
pressure for some time, and in March last year reported a 45%
drop in full-year profit, hurt by weak demand and rising costs.
British greeting card retailer Card Factory said
it expected lower annual earnings after the general election and
weak consumer confidence hurt performance in the key Christmas
period, sending its shares down 17%.
That contrasted with homewares retailer Dunelm
which forecast a near 20% jump in earnings for the first half of
its fiscal year, benefiting from its decision not to discount
during the holiday season, which included Black Friday and
Christmas.
This more upbeat outlook echoed British clothing retailer
Next, which raised its full-year profit forecast last
week after a better-than-expected Christmas performance.
'ONE-OFF ISSUES'
In an indication of how hard supermarkets had to work over
the festive period, Tesco said it had cut prices, delivered the
best operational performance in six years and seen the biggest
ever day of UK food sales in its history.
Tesco, which has a 27.4% share of Britain's grocery market,
also updated on trading in the third quarter period before
Christmas, when life-for-like sales fell by 0.4%.
Although M&S, one of the best known names in British retail,
reported a rise in quarterly underlying sales for its overall UK
business for the first time since 2017, it was overshadowed by
"one-off issues", which knocked its shares 7.3% lower.
M&S said its full year guidance was unchanged, although
gross margins were expected to be around the lower end of
guidance, largely offset by cost reductions.
(Additional reporting by Sarah Young; Writing by Alexander
Smith; Editing by Carmel Crimmins)
