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Sales during the Christmas period at UK luxury food retailer Fortnum & Mason jumped almost a fifth as the refurbishment of its flagship London store helped boost the number of customers to record levels.
The 316-year-old group welcomed more than 6mn customers at its physical and online stores over the five weeks to Christmas, 30 per cent more than last year, sending revenue for the period up 17 per cent compared with 2022.
Tom Athron, who has led Fortnums since December 2020, said that shoppers were returning in full force and the Christmas sales increase indicated “quite a significant shift” for the retailer.
“[Customers] come for the full experience,” he said, adding: “The shop looks beautiful, it’s dressed beautifully, there are things that you can do at Fortnums.”
The reopening of the third floor at the group’s flagship Piccadilly store, which hosts a food and drinks studio and a number of “experiences” such as cooking classes, helped increase footfall.
“If we’ve got effectively six trading floors in Piccadilly, having one of them closed is quite a big deal for us,” said Athron.
In October the food retailer also restarted deliveries to the EU for the first time since March 2021, providing a boost to the number of international customers shopping online.
“That’s very exciting for us,” said Athron. “Pre-Brexit that was about 7 per cent of our trade, so quite a lot of money.”
The group’s strong Christmas performance comes after a period of growth for the 12 months to July. Its revenue for the year increased 12 per cent to £208.6mn compared with £186.5mn in the previous 12 months.
Rapid inflation throughout the year meant the group faced higher costs for food and labour which put pressure on margins across the sector, but it managed to generate 23 per cent pre-tax profit growth to £7.1mn for the year.
As a result of higher prices, Fortnum & Mason “did see people trading down, so more customers spending slightly less, which again, I think is a feature of retail more broadly,” said Athron.
However, Athron, a former John Lewis executive, said that the group was starting to feel inflationary pressures cooling: “In 2022, we typically saw price increases of somewhere between 5 and 10 per cent and in the last 12 months it’s been more like 5 per cent.”
In-store sales made up a greater proportion of overall revenue for the year, the group said, adding that the 12 per cent rise was generated by a combination of volume growth and price increases.
Online sales fell 11 per cent compared with 2022 when it tripled from 2019 levels. Online trade accounted for 36 per cent of all retail sales, although Athron said he did not see its share falling below 35 per cent.
Although the group welcomed the surge in demand over Christmas, it said that the jump in late seasonal demand tested Fortnum’s infrastructure to the limit.
“To address this growing demand, we announced yesterday that we will be consolidating our distribution centres into a single 400,000 sq ft warehouse space in Northamptonshire,” the group said.
