Marks & Spencer is likely to have been one of the strongest performers in the UK retail sector over the Christmas period, Russ Mould, investment director at AJ Bell has said, with data relating to Christmas trading set to be revealed over the coming days.
“The first trading day of the new year often leads investors to speculate which retailers had a good or bad Christmas," Mould commented. "Judging by its share price jump, investors are putting their money on Marks & Spencer to have cleaned up over the festive season.
"There were already reports pre-Christmas that shoppers were loading up their baskets with Marks & Spencer’s premium-quality food and drink products, and its clothes were such a big hit with the nation during 2024 that it seems logical to suggest many people gifted them on 25 December.
“However, nothing is certain until we see the actual numbers and there is still the potential for Marks & Spencer to disappoint."
Lidl Christmas Sales
Discounter Lidl was the first major UK grocer to report its Christmas sales, noting a 7% rise in revenue over the four weeks leading up to Christmas.
"Lidl flagged a bumper festive performance, including strong demand for party food and bottles of fizz – traditionally an area where Marks & Spencer dominates," Mould added.
“Lidl’s revenue growth for the four weeks up until Christmas Eve was down on the same period a year earlier, but that’s without the tailwind provided by higher inflation in 2023 and the chain is attracting more customers than ever before."
The Bigger Picture
As regards the broader picture for the UK grocery landscape, it "might take another week or so to get a clearer picture of retail’s golden quarter," Mould added, noting that it "seems highly likely that the sector will have its fair share of losers.
"Spending data from Visa implies that electronics retailers could have seen a last-minute rush, but many clothing and accessories providers might have struggled.”
