Comment: Christmas losers stuck in squeezed middle

IF CONSUMERS are leading the recovery, then someone should tell three of our biggest retailers that they have work to do.

Marks & Spencer, Morrisons and Tesco produced results described by analysts as dire, although in the case of M&S the criticism may be a little harsh.

Trading at M&S was only up because of strong food sales, while sales fell at the two supermarket groups. Each has a particular reason – or excuse – but there is a growing view that they have simply got caught in the squeezed middle as shoppers opt for either the top end or the discounters.

In the case of the department stores, M&S and Debenhams have been sacrificed for Next, Zara and John Lewis. The supermarket war appears to have been won by Waitrose and Sainsbury’s in the premium bracket while Aldi and Lidl have mopped up the bargain shoppers.

Once again questions are being asked of M&S boss Marc Bolland, who continues to blame the unseasonal weather for hitting sales of the chain’s important autumn/winter range, while failing to acknowledge that Next and John Lewis enjoyed good figures – and the same weather.

For M&S, the problem is not so much that the product range is poor – its latest collection was well-received – but that it may be pitching it at the wrong group of consumers. Its core market is still in the over-50s age group and it is these people who are buying the clothes that are primarily aimed at the young while the younger consumers are choosing to go elsewhere.

Discounting was a big issue for all retailers, but they again split into two groups and it is notable that those which chose not to discount – Next and Ted Baker – have seen sales rise strongly, while those that joined the cost-cutting have simply forfeited more of their bottom line.

Next and Ted Baker called it right in believing the run-up to Christmas is a time when consumers are prepared to pay more.