Five questions answered on Tesco’s and Morrisons’ Christmas sales slide

Why did supermarket sales take a hit?

Morrisons and Tesco have reported a fall in their Christmas sales. We answer five questions on both supermarkets’ lacklustre sales.

By how much has Tesco’s and Morrisons’ sales fallen?

In the six weeks to January 5 2014 Morrisons’ like for like sales fell 5.6 per cent, causing its shares to plummet by 7 per cent.

Tesco's like-for-like sales fell by 2.4 per cent over the festive period. It’s shares fell by 4 per cent.

What have the companies attributed these weaker sales to?

Morrisons believe its sales were weak due to a lack of online presence, as well as competition by cut-price shops, such as Lidl and Aldi. The supermarket is set to enter the online shopping market on Friday, when it will launch a trial in Warwickshire, covering parts of the Midlands.

Tesco simply said the fall in sales was due to a "weaker grocery market" in the UK.

What else did the supermarket giants say?

Morrisons said it was "disappointed" by the sales. In a statement the retailer said:

"The difficult market conditions were intensified for Morrisons by the accelerating importance of the online and convenience channels, where Morrisons is currently under-represented, and by targeted couponing which was particularly prevalent in the market this Christmas."

Tesco, which also saw a 0.7 per cent fall in its overseas sales, said its move to open fewer stores in the UK was also behind the sales drop.

Philip Clarke, chief executive at Tesco, said: "Our overseas performance has improved since the third quarter, driven by an improving trend in Europe. This is despite continuing external challenges, including the recent political disruption in Thailand."

What have the experts said?

Will Hedden, sales trader at spread-betting firm IG, told the BBC: "There is the impression that more and more business is going online, and Morrisons has been slow to come into that area.

"Their online offering is going to need to become pretty good, pretty quickly to compete."

While George Osborne took the release of the figures as an opportunity to say they showed that the industry is "very competitive".

"We have to work through the long-term economic plan that is turning Britain around and we need to make sure we get balanced growth across the whole country and we get investments and exports alongside consumer spending,” he told the BBC.

How did the other big supermarkets do over Christmas?

Sainsburys posted its lowest growth figures for nine years prompting the company to scale back its growth forecast for 2014. It reported this week that its sales had increased by just 0.2 per cent in the 14 weeks to January, despite prices rising by some 2.5 per cent.

Waitrose, on the other hand, revealed on Wednesday a 3.1 per cent rise in underlying sales in the five weeks to Christmas Eve. This was boosted by a 33 per cent rise in online grocery sales.

Co-op reported a 1 per cent rise in underlying sales at its grocery stores in the 13 weeks to 4 January.

A Tesco Express on Clapham High Street. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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What is the New Hampshire primary, and why does it matter?

Although the contest has proved less influential in recent years, the New Hampshire primary is still a crucial event.

While the Iowa caucuses are the first electoral event in the US’s presidential process, the New Hampshire primary is the candidates' most important early test before the action explodes across the rest of the country.

The stakes are high. If the nominations aren’t decided soon, the campaigns will be damned to a marathon of costly state primaries and caucuses; New Hampshire is their first best chance to avoid that fate. But it didn’t always work this way.

Primaries only became the key element of the nomination process relatively recently. Until the postwar era, presidential candidates were chosen at the national conventions in the summer: in the run-up to the 1960 election, future president John F Kennedy famously entered only one primary (West Virginia’s) to prove that a Roman Catholic could win a Protestant state.

It was only after the turmoil of the 1968 nomination, widely perceived as an establishment fix, that the McGovern-Fraser Commission changed the Democratic party’s rules to end the power of the “smoke-filled room” over the nominating process, prompting many states to adopt meaningful primaries for both parties' nominations.

First in the nation

Unlike caucuses, which generally are used in smaller states that would rather not pay for full-scale ballots, primaries are secret-ballot elections that allow voters to choose who will be their preferred nominee. But not all primaries are the same.

The parties sometimes hold their votes on the same day, as they do in New Hampshire, or on different ones. A primary may be open (allowing any voter to register a preference) or closed (allowing only pre-registered party supporters to vote). New Hampshire has a mixed system which allows voters to register in a primary on the day before voting without declaring a party affiliation.

That means that while all voters registered with a party must vote in that party’s ballot, the New Hampshire result often hinges on these unaffiliated voters. Because they can vote in whichever ballot they like and can register so close to primary day, the state is notoriously difficult to poll.

New Hampshire has cemented its first-in-the-nation status by passing a law that requires its lawmakers to move the state’s primary to pre-empt any other state’s, no matter how early. That means it’s traditionally been not just an important indicator of how candidates are faring, but a way of winnowing the field and generating or killing funding. Candidates who perform poorly generally find their access to money suddenly dries up.

The arguments against New Hampshire’s outsize role are many. Like Iowa, it’s hardly representative of the US as a whole, being a small state with an overwhelmingly white population. And while (unlike Iowa) it has no powerful evangelical Christian element, it retains a very distinctive tradition of small-town New England politics that demand a particular kind of face-to-face, low-to-the-ground campaigning.

But this time around, other factors have cut into New Hampshire’s significance.

On the Republican side, the primary’s winnowing role was in large part pre-empted when the TV networks holding debates allowed only the higher-polling candidates on stage, effectively creating a two-tier system that tarred lower-polling candidates as also-rans long before voting began. Meanwhile, the financial calculations have been transformed by campaign finance reforms that allow for almost unlimited outside fundraising – allowing candidates to build up the reserves they need to withstand a humiliating defeat.

Nonetheless, a truly surprising New Hampshire result could still change everything.

Shuffling the deck

New Hampshire hasn’t always chosen the winner in either the nomination contests or the general election. But it has provided more than its share of political upsets and key turning points, from persuading Lyndon Johnson not to stand again in 1968 to resurrecting the candidacies of Hillary Clinton and John McCain in 2008.

The incremental campaigns for the nominations are all about the perception of momentum, and a notional front-runner can be dislodged or destabilised by a poor performance early on. That’s especially true in this year’s cycle, in which both major parties are grappling with huge surges of support for outsider, anti-establishment candidates.

Mainstream Republicans have spent months trying to end Donald Trump’s noisy domination of their crowded field. Trump was indeed defeated in Iowa, but not by a moderating force: instead, it was radical conservative Ted Cruz who overturned him.

Cruz is loathed by the party establishment, and he stands little chance of appealing to mainstream voters. Marco Rubio’s strong showing in Iowa briefly made him something of a standard-bearer for the party’s moderates, but a disastrous turn at the last debate before New Hampshire has thrown the future of his candidacy into doubt.

The primary will also reveal who, if any, of the more moderate Republican candidates – among them Jeb Bush, John Kasich and Chris Christie – will survive. While Bush has a massive funding advantage (albeit with precious little to show for it), Kasich and Christie both need a strong showing in New Hampshire to reinvigorate their financial reserves.

On the Democratic side, the key question is whether Bernie Sanders can make good on the surprising energy of his populist, grassroots challenge to Hillary Clinton. He is currently the heavy favourite in New Hampshire: even if Clinton somehow pulls off a miracle win there as she did in 2008, the closeness of the race is already stimulating both campaigns' national organisation and spending. And with what could be a long race between them heating up, the two’s growing mutual acrimony may yet start to undermine the Democrats' national appeal.

Gillian Peele Associate Professor in Politics and Tutorial Fellow at the University of Oxford.

This article was originally published on The Conversation. Read the original article.