Online sales prove crucial as Christmas delivers for Debenhams

DEBENHAMS was the pick of the bunch of another flurry of festive trading results, with the department store group the latest to hail its online performance as the star turn.

The group said that sales at stores open more than a year rose 5 per cent in the five weeks to 5 January, with same-floorspace sales over a longer 18 week period up 2.9 per cent.

Debenhams, like fashion clothier Next last week, saw strong outperformance in its online offering, with sales up just under 40 per cent over the 18 weeks to 5 January.

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Michael Sharp, chief executive of Debenhams, sounded a cautionary note on prospects, however. “We continue to

believe that, whilst consumers have become acclimatised to the new economic reality, we don’t anticipate a significant change in consumer confidence in the remainder of the year,” he said.

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The company said it had increased its cut-price offers to draw in customers, in response to greater promotional activity on the high street this Christmas compared to 2011.

Consequently, it said it expected its gross profit margins for the 2012-13 financial year to be only ten basis points higher rather than the 20 basis points it had earlier suggested.

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Richard Hunter, head of equities at broker Hargreaves Lansdown, said: “Online sales were again a major driving force in Debenhams’ progress, whilst a promotional burst in the lead-up to Christmas also helped propel sales to record levels,

despite tough comparatives [in the same period of 2011].”

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Another winner in the period to highlight its internet selling success was Domino’s Pizza Group, calling its e-commerce sales “the star of the show”.

Domino’s total e-commerce sales in the UK and the Republic of Ireland leapt 56 per cent to £84.1m in the 14 weeks to 30 December. Online sales for the year jumped 46 per cent to £268.6m. Sales from electronic mobile

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devices now account for nearly 20 per cent of all online orders, the company said.

Domino’s said its like-for-like sales in over 600 “mature” UK stores grew 5 per cent in the 14 week period. However, in a sign of the struggling Irish economy, sales in the Republic in 47 mature stores were down 3.8 per cent.

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Lance Batchelor, group chief executive, commented: “Yet again, Domino’s has delivered solid results in a tough trading environment.”

Elsewhere, trading park homewares retailer Dunelm revealed that same-floorspace sales rose 2.2 per cent in the 26 weeks to 29 December. Dunelm’s total sales lifted 13.4 per cent to £340m from £299.9m, helped by the opening of 10 superstores.

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Less successful was drinks retailer Majestic Wine, where like-for-like sales rose 1.1 per cent in the seven weeks to 31 December. Sales over the first 39 weeks of the company’s financial year edged up 0.8 per cent.