London Briefing: For M&S and John Lewis much is banking on Christmas ad

Persuading shoppers to part with their cash will be tougher than ever in Brexit Britain

John Lewis launched its first Christmas ad in 2007 and then, as now, its primary purpose was to drive sales in the run-up to December 25th. Photograph: Yui Mok/PA Wire

John Lewis launched its first Christmas ad in 2007 and then, as now, its primary purpose was to drive sales in the run-up to December 25th. Photograph: Yui Mok/PA Wire

 

Can Paddington save Christmas for Marks & Spencer? And what will another cuddly creature – currently still hiding under the bed – be able to do for Britain’s favourite department store group, the John Lewis Partnership?

The bear from darkest Peru has been chosen by M&S as the face of its festive advertising campaign, which launched on Tuesday and is linked to the release of the Paddington 2 film on Friday.

M&S’s family-focused advert is a heartwarming tale of how the little bear saves Christmas when he mistakes a burglar on the snowy roof for Santa. They deliver the stolen presents together and the burglar sees the error of his ways.

Although London’s Oxford Street lights were switched on Tuesday by singer Rita Ora, we all know the official countdown to Christmas doesn’t start until the eagerly awaited John Lewis ad hits the airwaves.

As with last year, the retailer has launched a teaser campaign in the run-up to the release of the ad, which is expected on Thursday or Friday. There’s a Twitter account, @UnderTheBed2017, featuring a four-second clip of a furry grey creature with a big pair of eyes peeping out of the dark, presumably from beneath the bed.

Early omens

John Lewis launched its first Christmas ad in 2007 and then, as now, its primary purpose was to drive sales in the run-up to December 25th. But persuading shoppers to part with their cash will be tougher than ever in Brexit Britain – and early omens are not encouraging.

Figures from the British Retail Consortium (BRC) on Tuesday added to the weight of evidence that consumers are cutting back in the face of higher inflation and falling disposable incomes.

According to the BRC survey, retail sales fell by 1 per cent on a like-for-like basis in October, with clothing sales particularly hard hit. Total non-food sales in-store fell by 2.1 per cent in the year to October, the steepest decline since the BRC started including them in the survey in January 2012.

The poor performance last month is a cause of real concern for retailers ahead of the crucial Christmas period, said the BRC chief executive Helen Dickinson. Shoppers are becoming more cautious in what they can afford and Dickinson suspects they may be using what cash they have to pay for days out instead of shopping trips.

Mild October

The mild October weather won’t have helped sales of knitwear, boots and coats and there’s probably also an element of consumers waiting for the bargains they know will be on offer this month, in the now traditional post-Thanksgiving Black Friday sales frenzy. This year it falls on November 24th – two days after the autumn budget.

Given last week’s rise in interest rates from their record low – the first hike in more than 10 years – the BRC chief is calling on the chancellor “to reflect on this disappointing state of play” and deliver “a shoppers’ budget”.

More gloomy news from the retail sector is expected Wednesday when M&S releases its first half results. Analysts are forecasting a double-digit fall in profits, to somewhere around £200 million, and chief executive Steve Rowe is thought likely to announce more store closures as he struggles to restore profitability at the 133-year old retailer.

M&S is already in the process of closing 30 of its larger stores in the UK, and converting others into food-only as part of a plan to slash the amount of floor space devoted to its struggling clothing ranges.

The food side of the group, which had been a star performer in recent years and which Rowe used to run, has also been showing signs of a slowdown in recent months.

Turnaround plan

New M&S chairman Archie Norman, who transformed the supermarkets group Asda in the 1990s, is supporting Rowe in the tougher turnaround plan. Norman is keen for M&S to shake off its image as a retailer for the over-55s and wants new, cheaper clothing ranges to appeal to younger customers.

Rowe’s views on Christmas will be keenly awaited in the City. Last week, his counterpart at Next, Simon Wolfson, warned of “extremely volatile” trading, sending shares in the retailer tumbling.

But before Christmas, there’s Black Friday to negotiate. Online giant Amazon is planning its now usual 10-day sale “spectacular”, starting on November 17th and running to the 26th. This year it’s upping the pressure on high street rivals by opening a “pop-up experience” in London’s Soho Square, offering games, prizes, themed workshops and crafts tutorials, as well as advice from “gifting and lifestyle experts”. Can’t wait.

Fiona Walsh is business editor of theguardian.com

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