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Thursday, 13 January, 2000, 10:24 GMT
Christmas shops in search of sparkle

More evidence is emerging of how UK retailers fared this Christmas. It is becoming clearer that sales were much stronger for most stores than last year. But retailers were forced into discounting at an early stage, putting pressure on profit margins.

On Wednesday House of Fraser, Argos and Safeway all reported strong sales in the Christmas period.

But the Body Shop cosmetics chain saw its UK sales dip, creating a mixed picture of how the High Street fared in the key Christmas sales period.

On Wednesday, Marks & Spencer posted a drop in sales. While electrical retailer Dixons has seen its sales rise, its share prices suffered because of its weaker margins.

House on Fraser said on Thursday that like-for-like sales, stripping out purchases made in new store space, rose 4.7% in the seven weeks to 8 January, with total sales 10% higher.

The department store group said it had maintained its gross profit margins, despite continued price competition, particularly in the clothing sector.



House of Fraser stores include Dickens & Jones, DH Evans, Army & Navy and Rackhams.

Argos sales jump

Sales jumped at the Argos catalogue shopping chain during the key Christmas and New Year trading period.

Argos saw total sales rise 9.2% in the 14 weeks to 8 January compared with the same period last year.

On a like-for-like basis, sales jumped 6.9%.

The improvement in sales is attributed to the introduction of a new catalogue, which increased the range of goods in each store by 30%.

Chief executive John Peace, who joined the company two months ago, said the figures were an improvement on the 3% decline seen at the same time last year.

Argos is owned by Great Universal Stores, the UK's biggest home shopping group.

Its troubled home shopping arm - which includes Kays and Innovations catalogues - saw its rate of decline slow as it cut prices.

Safeway became the first of the UK's main foodstore chains to report on Christmas trading. Its total sales rose by 7.8% in the 12 weeks to 8 January.

Like for like sales increased by 6.1%.

Its margins are in line with expectations, the group said.

Body Shop dip

Ethical cosmetics group The Body Shop revealed on Thursday that its UK sales fell in the run up to Christmas.

In the nine weeks to Christmas day, UK sales fell 3%.

The bad news was confined to the UK, which dragged down the group's global performance. Globally, like-for-like sales were unchanged from last year, while total sales grew 3%.

"In our key UK and US markets, margins were strong during the Christmas period and the full year will see improved profit contributions from both markets," chief executive Patrick Gournay said.

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