Despite a particularly tough year, research firm Mintel forecasts some Christmas cheer for Britain’s retailers. Latest research predicts that December’s retail sales will reach £48.7 billion, growing a respectable 3.8% compared to last December, when sales hit £46.9 billion.
Sales through non-food retailers this December are expected to reach £23.9 billion (including £4.2 billion from online sales generated by physical stores); while food retailers will enjoy sales of £18.8 billion (including £1.4 billion from online sales generated by physical stores). And Mintel estimates that Internet pure players will account for £6.0 billion worth of sales.
Mintel forecasts total online sales this December will be worth £11.6 billion, accounting for 23.7% of all retail sales. The forecast amounts to steady growth for the month.
Implications for this year
“In normal circumstances, with the current low unemployment and solid wage growth, this would point to an even better Christmas than in past years. However, this has been far from an ideal run-up, with Brexit uncertainty dragging on and an election now a late additional hurdle for the sector to pass and process before the big day,” says Nick Carroll, associate director of retail research at Mintel.
Based on shopper behavior in the face of uncertain times the past few festive periods, Mintel believes underlying demand will hold up reasonably well, he adds. Retailers’ margins may be stretched by demand for value and a short holiday selling season this year.
“Although high-street retailers may be under pressure, over half of shoppers think visiting stores is a good way to get into the festive experience. Therefore the run-up to Christmas is a great opportunity to get shoppers into stores and enthused about the physical shopping experience,” Carroll says. “Those that can provide valued experiences whilst tapping into other underlying trends, such as local sourcing and ethical production, combined with attracting value-conscious shoppers, put themselves in a good position this festive season.”
The Black Friday shopping frenzy
Mintel stats show that last year, almost two in five (39%) British consumers made a purchase during the Black Friday promotions. Avoiding the retail rush, 86% of Black Friday shoppers bought online, while 29% bought in-store. Electrical items were the most popular purchases, bought by 49% of Black Friday shoppers, followed by clothing and footwear (38%) and beauty and fragrance (25%).
Bagging a seasonal bargain ahead of December, 67% of Black Friday shoppers bought something as a Christmas gift. While 58% say they delayed planned purchases until the event, highlighting how disruptive Black Friday can be to trading either side of the sales bonanza.
“Black Friday is here to stay, and we expect it to be potentially the biggest it’s ever been in the UK,” Carroll says. The timing of Black Friday 2019 after payday and less than four weeks before Christmas gives retailers a chance to capitalize on shoppers looking to save during an uncertain period, he adds.