Christmas will bring a much-needed 2.5% boost in sales for 2016

21st Oct 2016

Oxford Street's Christmas decorations outside Selfridges. Photo credit: My-Retail Media

Oxford Street’s sparkling, glowing orbs are back for a fourth year, and in times of uncertainty, it’s comforting to see some things that are unlikely to change. Along with the 1778 snowball decorations alight on Oxford Street, the annual mayhem around Christmas sales is also likely to bring another boost of sales for UK retail. According to the latest research from Mintel, retail sales are predicted to rise by 2.5 per cent this year to £42.2 billion. It’ll be some much needed good news for the sector which this week faced reports of warm weather subduing September sales.

Reports out this week found consumers will be determined to seek out bargains, with 23 per cent planning to delay big ticket Christmas purchases until they have seen the Black Friday and Cyber Monday offers. In 2015, 20 per cent of UK consumers bought online and 11 per cent in-store during the Black Friday and Cyber Monday sales periods.

As the UK’s peak shopping period shifts its focus from a slow build up across six weeks to the middle of December, to multiple numbers of days of flash sales and intense purchases, the sales between November and December become increasingly difficult to predict.

Thankfully, Mintel argues one thing is for sure: there will be growth, and it will be found in online shopping. This year 20 per cent of consumers plan to shop online during the lead up to Christmas, with this rising to 24 per cent of men and 28 per cent of 18-24 year olds.

When asked why they would be favouring the shopping online over traditional bricks and mortar shopping experiences, 55 per cent of the consumers polled said they wanted to take advantage of the cheaper prices on the internet, 49 per cent said it was to avoid crowds and another 49 per cent said they wanted to shop when it suited them.

Director of research at Mintel, Richard Perks, said the economic backdrop for consumers remained favourable. “Real incomes are rising and unemployment is falling. There are some worrying signs though. Consumer credit has risen back to record levels and the housing market has weakened a little but overall, the prospects for Christmas remain good,” he said.

Perks went on to add that making the distinction between in-store and online shopping had become an increasingly “artificial” measure: “We are seeing pure players recognise the advantages to having a physical offering, signified by Amazon and Zalando’s interest in moving to the high street. At the same time, a number of high street retailers now price match against online retailers, trying to fight back against the continued belief among shoppers that it’s cheaper to buy online,” he added.

In 2015, 93 per cent of British consumers purchased gifts for Christmas. Some 86 per cent did this in store, while 76 purchased online. Just 8 per cent of consumers bought all of their presents online, compared to 18 per cent who bought all their presents in store.

As for the annual debate over whether Black Friday and Cyber Monday promotions actually help Christmas sales, Perks argued that this year’s result will hang in the balance of how retailers handle Black Friday: “December 2016’s results will very much depend on what retailers do about Black Friday, but if they cut back on such promotions then there will be a knock on benefit to December, as sales roll over into this month. In 2015, December’s results were weak, partly because of Black Friday and partly because of the unseasonal weather, which seems to have been a constant story over the last year. So the comparisons this Christmas are easier.”

Ava Szajna

My Retail Media


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