What Do John Lewis’ Spectacular Sales Mean For High-Street Rivals?

Today’s update from John Lewis regarding its Christmas sales numbers is hugely impressive. For example, the employee-owned retailer delivered a like-for-like sales increase of 4.8% for the five weeks to 27 December, with it relying more heavily than ever on online sales.

In fact, sales at its stores fell by 1%, with online sales now representing 36% of the company’s turnover. Within this, click and collect made up 56% of online orders, thereby showing just how important having a store network is.

So, with such impressive sales numbers, does this mean that retail sector peers such as Morrisons (LSE: MRW), N Brown (LSE: BWNG) and Dixons Carphone (LSE: DC) have enjoyed an equally prosperous Christmas?


With its online offering now gathering pace, Morrisons could be a surprise performer in 2015. Certainly, it has been slow out of the blocks on the online grocery shopping front, with its offering only being rolled out a year ago, but it could now benefit from much stronger sales growth than its rivals simply because it has a new, faster growing division to boost its top line.

Furthermore, with John Lewis’ sales figures showing that consumer expenditure seems to be on the up, Morrisons may have benefited from a UK consumer with a higher disposable income than in recent years. This could boost its share price in the short run and, looking ahead, its current yield of 6.9% indicates that there could be share price growth (as well as a relatively high income) on offer in the long run.

N Brown

As an almost exclusively online-focused retailer, N Brown should continue to benefit from a shift to shopping online by consumers. As a result (and like John Lewis), its Christmas trading may have been relatively strong.

However, where the company remains behind many of its rivals is in terms of click and collect which, as John Lewis’ figures showed, is becoming an even more important part of sales. So, while N Brown does have a small store footprint that is growing, it remains behind many of its peers when it comes to offering customers the convenience of click and collect.

That said, the company still seems to offer good value for money at its current share price. For example, it has a price to earnings (P/E) ratio of 14.9 and, with earnings expected to grow by 10% next year, could be a strong performer in 2015.

Dixons Carphone

As John Lewis’ sales figures suggest, UK consumers’ appetite for electronic goods appears to be growing rather than declining. As such, Dixons Carphone may have experienced strong sales performance during the Christmas period.

In addition, it seems to be well-placed to benefit from the increasing use of technology via the so-called internet of things, with Dixons Carphone aiming to become a one-stop shop for all household technology requirements. This may provide it with a competitive advantage in an otherwise crowded marketplace and, with a relatively large footprint of stores, it should also benefit from an upsurge in the popularity of click and collect moving forward.

With shares in Dixons Carphone currently trading on a price to earnings growth (PEG) ratio of just 0.9, they seem to offer growth at a reasonable price and could have a strong 2015.

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Peter Stephens owns shares of Morrisons. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.