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Thursday, 12 January 2012

Retailers' results being punished by the markets

Tesco has reported a 2.3% fall in sales over Christmas, which is in stark contrast to Sainsbury's that saw a record Christmas.  The markets have punished this performance by Tesco which has seen its shares fall by 14% in early trading.  Other retailers that have disappointed the markets are Halfords, Argos, Thorntons, Mothercare and Homebase whose sales have fallen by around 2-4% in the run up to Christmas.  However, other companies seem to have done quite well recently.  Is there a market shift going on?  Majestic Wines, Sainsbury's, JD Sports, Ocado, Debenhams and Marks and Spencer have all performed well.  Shoppers have definitely changed their habits but those companies that can move fast to new markets or predict shoppers future behaviour are set to still perform well. 

Little Chef, who has announced that it is going to cut its sites by a third, is an old established brand that has changed little over the years.   It now seems to be facing up to the reality of the changing market.

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