
As one of the UK’s retail heavyweights, JD Sports has long been a barometer of success in the UK’s sports fashion market.
But this Christmas, its performance didn’t exactly meet expectations.
Despite organic revenue growth of 3.4% for the nine weeks to 4 January, JD Sports downgraded its profit forecast due to “challenging and volatile” market conditions and declining like-for-like sales, especially during November.
While December brought a much-needed boost as like-for-like sales rose by 1.5%, it wasn’t enough to offset the 6% slump in like-for-like sales in November.
This raises a crucial question: did JD Sports make a strategic misstep by sticking to its full-price discipline of avoiding heavy discounting, or are its poor results a reflection of wider economic factors beyond the retailer’s control?
JD Sports’ disciplinary approach
In an environment where competitors are discounting heavily to entice cash-strapped shoppers, JD Sports has “never” been a brand to engage in lots of promotions, said CEO Régis Schultz.
Last May, the retailer’s finance boss Dominic Platt reiterated that the firm was “not participating in the promotional environment and therefore, it’s not a surprise that our sales are backwards a bit.”
It’s an understandable move to avoid promotion overload, especially as deep discounts can erode brand value and margins.
However, this strategy is only sustainable if the brand offers something unique or compelling to offset higher prices. Unfortunately, this wasn’t the case for JD Sports this festive period.
M&S CEO Stuart Machin has been steering clear of heavy discounting as it pushes ahead with its “first price, right price” strategy, which is certainly paying off after business celebrated bumper festive results last week. Throughout 2024, it saw over 80% of its clothing sold at full price.
However, what worked for M&S—a generalist retailer with broad appeal and older consumer base —didn’t translate to JD Sports, a brand targeting younger, trend-conscious consumers.
This will no doubt have been exacerbated by waning demand for Nike, one of JD Sports’ biggest brand partners, among Gen Z shoppers.
GlobalData senior apparel analyst Louise Deglise-Favre explained: “While the group has prided itself on its discipline regarding promotions to protect its margins, this might have hampered sales by making JD Sports less attractive to price conscious consumers during a tough economic climate, especially during Black Friday.”
She’s not wrong. In this lingering cost-of-living crisis, many consumers heading to JD in the run up to Christmas would have been looking for bargains—or at least some kind of discount.
But hindsight is a wonderful thing, so aside from its promotional strategy, what else went wrong?
A tale of two channels
It’s also no surprise that store sales outstripped online during the period. When strolling around your busy local shopping centre, who’s got the time to go from shop to shop on the hunt for the best deal? You see something you like, or something you can tick off of your Christmas shopping list — you buy it.
Online is a different story. JD Sports doesn’t offer anything particularly unique for true sportswear aficionados or sneakerheads.
If I’m hunting for a pair of trainers to gift my sister over Christmas, it usually involves a quick Google search – and the results often favour Asos, Very, or Zalando. These online-focused brands are likely to offer the same silhouettes at a cheaper price point because – surprise surprise – they’re running discounts.
And if I want something not every Tom, Dick, and Harry will be wearing, I’d hedge my bets with Footlocker, Flannels, or head to Nike.com. As things currently stand, JD Sports range does not have the depth to justify its full-price stance. This likely cost the business – particularly in its November sales slump, when many competitors will have been running hefty Black Friday discounts.
Offering: A bigger problem?
JD’s performance with footwear fared much better than clothing, which makes sense given younger consumers’ love for trainers. But given that that the wider athleisure boom is far from over, it is possible JD needs to re-evaluate its clothing offer.
Does it speak to its core customer? Personally, it doesn’t speak to me. Granted, I may be ageing out of JD’s target demographic, but the range feels dated and uninspired.
Compare this to Asos, which has leveraged relationships with footwear titans to secure exclusive drops on its site from brands like New Balance and Adidas. For a retailer of JD’s size and status, this shouldn’t be too much to ask. If JD is pushing for exclusivity, it hasn’t succeeded in showcasing it effectively to its audience.
With a run-of-the-mill range and high prices, it’s no surprise JD had a lacklustre Christmas. If you’ve got a great range, you can afford to hold firm against discounting. But in JD’s case, this strategy felt unrealistic given the calibre of its current offering.
Deglise-Favre added that its footwear sales “were likely driven by strong demand for highly desirable brands such as On, Hoka, and Adidas Originals,” highlighting that JD consumers crave newness. But the retailer seems stuck in a loop of the same old tracksuits and Nike Air Force One silhouettes.
If it wants to remain relevant, it’s up to JD to deliver fresh, exciting products that resonate with its audience.
Nike: A double-edged sword
Back in October, Schultz dismissed concerns over the sportswear titan’s recent poor performance, insisting it “will be fine,” adding that Nike’s struggles weren’t impacting JD’s performance.
But given the festive trading results, that reassurance now feels overly optimistic.
Peel Hunt noted that “the market has remained much more promotional than JD expected, with various players taking prices down across the board (e.g., 20% off all Nike).”
JD’s refusal to join this discounting frenzy may have preserved its margins, but it significantly impacted like-for-like sales, particularly in the US, where JD has the most exposure to Nike. Margins may be safe, but you can’t bank what isn’t sold.
The retailer’s reliance on the brand is projected to contribute 45% of global sales by the end of 2025. Yet, in Q4, US like-for-like revenue fell 3%, missing expectations and underlining the risks of over-reliance on a single supplier.
Reliance on a single supplier is always a risky game. This dependency underscores the need for diversification—not just in brands but in its overall offering — to stay competitive.
Retailers across the board are grappling with an incredibly tough consumer market, and JD Sports has not exaggerated the headwinds it expects to face in 2025. However, its disappointing Christmas results highlight a number of self-inflicted issues.
If JD hopes to regain its stride edge in the year head, it will need to address these internal challenges head-on.
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