Little Christmas cheer likely for M&S in interim results
M&S results will be in sharp contrast to Primark, which recorded a ‘significant’ increase in its UK market share
The Marks & Spencer’s store on Grafton Street, Dublin. Photograph: Dara Mac Dónaill
The annual orgy of Christmas advertising is about to explode onto our TV screens – and it promises to be every bit as lavish as last year despite the well-documented woes of the high street.
The mini-movies will tug at the heartstrings or make us laugh, or perhaps both. But the main point, of course, is to make us buy.
Details of both remain under wraps – John Lewis won’t even reveal which day its Christmas campaign kicks off, although some time next week is the best guess.
Marks & Spencer will beat John Lewis to it by unveiling its own ad at the end of this week. As with its retail rival, M&S is keeping the theme of its festive story secret, although that is not stopped a frenzy of speculation on social media.
Elton John is reported to have been paid £5 million to star in the John Lewis ad, and earlier this week a brief video clip of a rocket man bauble hanging on a Christmas tree did the rounds on Facebook and Twitter.
A teaser clip from the actual ad? John Lewis wasn’t saying.
The urgent need to attract more money into its tills will be underlined by M&S on Wednesday when it announces interim results. The figures will not make pretty reading, with analysts expecting yet another fall in food and clothing sales, and further decline in profits.
Under new chairman Archie Norman, M&S has accelerated its store closure programme, with at least 100 branches due to be axed by 2022. It’s just the latest in a long series of restructuring plans implemented by the group in recent years in an effort to return to its former glory.
The M&S results will be in sharp contrast to those of Primark, which on Tuesday boasted of a “significant” increase in its UK market share after reporting an increase of 1.2 per cent in underlying sales in the year to mid-September. The Primark performance is all the more impressive given the current state of the high street, and the fact that it has no online presence.
A cap on household energy prices seems like a good idea. The British government certainly thinks so, and confirmed on Tuesday that the new ceiling on consumers’ gas and electricity bills would finally come into effect from January 1st.
Set at £1,137 for a typical duel fuel customer, the price cap will protect 11 million households, saving them £1 billion in total. A typical user will save £76 a year, while those on the most expensive tariffs will save £120 a year.
But even as industry regulator Ofgem announced details of the cap it had to admit the new £1,137 limit for the typical household – it will be higher for customers who use more energy – will almost certainly have to be increased in April to reflect rising wholesale energy prices.
The price cap is designed to protect householders on standard variable tariffs, which are far more expensive than fixed price deals. Utility customers have been encouraged for years by consumer groups – and the government – to shop around, but millions have failed to heed the advice and languish on expensive default deals.
Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee, welcomed the cap as a “vital solution to fixing the broken energy market”, but raised concerns that customers could slip through the net and actually find themselves worse off.
Reeves made it clear the committee would be keeping a close eye on how the cap impacted the market, and urged the government to ensure that it “delivers as intended”.
There is a risk that the cap could give customers a false sense of security, making them even less likely to shop around for cheaper deals. While the price ceiling does provide protection, most customers would be far better off changing supplier.
Having ignored all the advice to switch, the 11 million households paying through the nose on standard variable tariffs are unlikely to suddenly change supplier now. If they did, though, they’d find their typical savings would be far higher than those offered by the price cap – and they wouldn’t have to wait until January.
Fiona Walsh is business editor of theguardian.com