LONDON (Reuters) – A Christmas crunch inflicted further pain on more British retailers on Thursday, with John Lewis warning its staff they may not get a bonus for the first time since 1953 as consumers changed shopping habits and the economy struggled.
FILE PHOTO: Signage is seen outside a Tesco extra superstore near Manchester, Britain January 8, 2020. REUTERS/Phil Noble
John Lewis flagged lower profits for its 2019 financial year, while Tesco (TSCO.L), Britain’s biggest retailer, ground out a 0.1% rise in underlying UK sales over Christmas, and Marks & Spencer (MKS.L) said waste in its food business and weak menswear and gift sales held it back.
Industry data showed British shoppers cut back on spending in late 2019, rounding off the worst year since at least the mid-1990s for retail sales amid uncertainty over Brexit, last month’s election and slowing wage growth.
Instead of buying goods, consumers opted to spend on experiences, data from payment card company Barclaycard showed. Cinema ticket sales were up 19%, while spending in pubs and on takeaway food rose by about 12%, the data showed.
Tesco said Prime Minister Boris Johnson’s resounding election victory in December, which broke the deadlock over Britain leaving the European Union and lifted financial market sentiment, had not released any pent-up demand.
Adding to worries that a pick-up may not materialise, Sainsbury’s (SBRY.L), Britain’s second largest supermarket, said on Wednesday it hadn’t seen any change in behaviour since the nation went to the polls.
Concerns over the strength of the British economy are being felt more widely and the pound fell to a near two-week low against the U.S.