Making sense of the past seven days

At the risk of coming across like Martyn “good news” Lewis, the newsreader that was ridiculed for arguing that it was nice to pepper the standard media diet of doom and gloom with something a bit more positive, congratulations to HMV boss Simon Fox.

He achieved over Christmas what many doubted he could pull off at the best of times – never mind in a downturn: a sales performance that smashed expectations.

Such as was the shock that HMV was even rewarded with a share price rise – an honour that has eluded almost any retailer you care to mention during the January reporting period.

Fox was careful to remind people that there’s a whole quarter to go before the end of the financial year, but, assuming the retailer keeps up the momentum, profits will be at the higher end of expectations.

There’s a lot about HMV’s experience that other retailers can take heart from. The business has had to adapt to the rapidly emerging digital music market and the bleed of entertainment sales online, as well as reinvigorate its traditional shops.

HMV was helped by a strong release schedule in core categories, but its Christmas success is testament to an effective self-help programme. Instead of watching sales go to online rivals, HMV established online credibility for its web sites.

As well as maintaining its specialist credentials in-store, it extended its range of must-have products, such as games and technology. In addition, it improved the general appeal of its shops with a makeover that seems to have worked from a business perspective, rather than simply making a design impact.

HMV got closer to customers, which was shown by the fact it signed up one million members to its Waterstone’s loyalty scheme within four months of the scheme’s launch.

And the good old discipline of effective margin and promotion management played its part. Enthused by the improvements and salivating at the prospect of bonuses if performance is kept up, HMV’s store managers are motivated to carry on giving their best.

Certainly, this was just one reporting period and it doesn’t do to get too carried away. But amid such dismal conditions for retailers, it’s worth celebrating the successes that do emerge.

No one is safe

Like-for-likes that others would have killed for didn’t stop Tesco’s shares going down on Tuesday. How well must a retailer have done last Christmas to buck the trend of investors’ flight from retail?

Although Tesco’s comparable store sales growth of 3.1 per cent was below what analysts had hoped for, it was hardly a rout.

In fact, it probably showed more about the state of the consumer economy than it did about Tesco. Subsequently, one of the most sensible points was made by Morgan Stanley’s Geoff Ruddell. As he observed, if a company accounts for an eighth of all retail spend, it is highly unlikely to emerge untouched by a slowdown. Surely the real point was that sales held up so well.