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British retailersCEOBHSVATYour browser does not support the element. are short on festive cheer. Consumer confidence remains weak ahead of Christmas. But behind the illuminated façade at Fortnum & Mason, an upmarket department store, the show goes on. Dancing pine cones adorn its atrium. Shelves are stacked with seasonal treats from mince pies to cognac butter and sparkling tea. “People are looking for a bit of joy,” says Tom Athron, Fortnum’s .From to Debenhams, a tough environment has wiped out four-fifths of British department-store chains in eight years. The recent budget dealt the latest blow. Changes to national-insurance contributions and a jump in the “national living wage” will raise Fortnum’s costs by about £3m ($3.8m), equivalent to two-fifths of its pre-tax profits last year.Fortnum’s is faring better than most. One reason is its focus on food, sales of which have largely remained offline. Fancy department stores with big apparel businesses such as Harvey Nichols and Liberty have struggled with the rise in online shopping. But Fortnum’s own-label biscuits, Scotch eggs and other edible indulgences still draw people in.In-store experiences have driven traffic. Fortnum’s has replaced its menswear section with a food hub hosting cooking demonstrations, supper clubs and a gin distillery—a redesign aimed at domestic shoppers, who account for 70% of sales. “We want to devote some space to pure theatre…something you can’t experience online,” says Mr Athron. Fewer Chinese tourists and the loss of -free shopping for overseas visitors have not hurt much. Footfall at the flagship Piccadilly store is a fifth higher than before the pandemic.Portraying Fortnum’s as an accessible brand has also helped. “Luxury is not a word we use,” says Jono Holt of Otherway, a branding agency which has advised the firm for a decade. Fortnum’s is hardly aimed at the frugal: its priciest wicker hampers retail for £6,000, and it will provide Christmas puddings for the royal household. But with the price of an item averaging £12, it caters to a broad range of shoppers. “You might not be able to afford a Chanel dress or a Hermès scarf, but you can buy a jar of Fortnum’s jam for £5.95,” says Mr Athron.Supply chains are newer terrain for the 317-year-old brand. Online orders have grown to over a third of its sales, up from a tenth before the pandemic. Fortnum’s has doubled its warehouse capacity in Britain and opened a new facility in Belgium in the past year. It plans to expand in America. But back on Piccadilly, its physical store attracts crowds. Behind its famed-glass vitrines, two squirrels kiss under mistletoe.
