As the Christmas decorations start to come down, the retail trading statements have started to flood in.

Can the industry, in which so many work rather than relax over the all-important festive period, now have its own celebration?

The early take is so far, so good. Despite a shock profit warning from the usually strong JD Sports, performance looks encouraging across the board.

“Early indications suggest a strong Christmas period with sales from Black Friday week until the New Year beating last year’s excellent performance”

Kantar grocery data revealed the “busiest” Christmas since before the pandemic as retailers notched up record sales of almost £14bn over four weeks.

Then, apparel and home powerhouse Next upgraded its profit expectations following better-than-expected sales in November and December.

There was good news from Boots, too. Its UK retail sales climbed 9.8% in the fourth quarter to November 30, helped by a strong Black Friday, and it reported increased market share for an 11th consecutive period.

Boots won’t formally reveal its Christmas numbers until later in the year, but said, “Early indications suggest a strong Christmas period with sales from Black Friday week until the New Year beating last year’s excellent performance.”

Plenty of treats

Even in tough times people generally are determined to enjoy Christmas, and it looks as if that has been the case for many retailers.

Consumers unsurprisingly sought out value, evident in the market share gains made by Aldi and Lidl and, in JD’s case, an “elevated level of promotional activity during the peak trading period” which hit margins.

But shoppers were also willing to splash out on treats, as was clear from the demand for premium lines, such as Sainsbury’s Taste the Difference – which helped JS notch up its highest market share for three years – and in Next’s strong showing.

Future uncertainties

While retailers may be happy to have delivered as good a Christmas as could be hoped for as consumers coped with a still-high cost of living, thoughts turn immediately to prospects for the year to come.

“On the face of it, the consumer environment looks more benign than it has for a number of years”

Next has flagged some big uncertainties in the coming months. Risks include rising unemployment and the impact of the expiry of fixed-rate mortgage deals. Most immediately, if there is continued disruption to the Red Sea and Suez Canal supply route then stock deliveries could be delayed.

Still, Next’s update gave retail reasons to be cheerful. It pointed out that as wages rise faster than prices, the cost-of-living burden should lighten. And, that for the first time in three years, input prices have been stable and Next expects zero inflation in its selling prices.

Perhaps most significanly, despite the uncertainties, Next said: “On the face of it, the consumer environment looks more benign than it has for a number of years”.

Focus delivers results

The retailers best placed to benefit will be those that are most focused on their fundamental mission and its execution. Sainsbury’s ‘Food First’ strategy, for instance, appears to have paid off and the grocer reported in November that “relentless focus has helped us deliver record market share gains.”

Similarly, Next highlighted in its Christmas update that “service improvements” had driven the strong performance of its online business.

It’s too soon to come to definitive conclusions about how Christmas played out for the industry overall. That will become much clearer next week when, along with Sainsbury’s, big names such as Marks & Spencer and Tesco will update.

Dolly Parton famously said: “It costs a lot of money to look this cheap.” For retailers, it takes hard work all year round to deliver a good Christmas – the tills don’t ring themselves. The retailers that did well over the festive period will now be best placed to make the most of the consumer environment – benign or otherwise – in 2024.