With the Christmas countdown in full swing, market intelligence agency Mintel is forecasting some festive cheer for Britain’s retailers. Its latest research predicts that December’s retail sales will reach £47.7 billion (including VAT), growing a respectable 4% compared to last December, when sales hit £45.8 billion.
Sales through non-food retailers are expected to reach £23.5 billion (including £4 billion from online sales generated by physical stores); while food retailers will enjoy sales of £18.6 billion (including £1.4 billion from online sales generated by physical stores). And in the battle between the clicks and bricks, Mintel estimates that internet pure players (online-only retailers), will account for £5.6 billion worth of sales.
“While there’s been much talk of how the High Street is being undermined by online retailing, it still only represents a relatively small part of overall retail sales, with most shopping still taking place in physical stores.” —Richard Perks, director of retail research at Mintel
With online sales generated by physical non-food and food stores estimated to hit £5.4 billion, combined with the £5.6 billion generated by internet pure players, Mintel expects total online sales this December will be worth £11 billion.
Richard Perks, director of retail research at Mintel, says: “We think that retailers can look forward to a reasonably good Christmas—not outstanding, but it won’t be bad either. While there are some reasons to be cautious, such as falling consumer confidence, there is no real sign of an underlying slowdown in retail sales growth. Retail sales have held up well this year and we expect the recent momentum is likely to be maintained, with retail sales growing at about 4% both in the final quarter of 2018 and in December itself.
“While there’s been much talk of how the High Street is being undermined by online retailing, it still only represents a relatively small part of overall retail sales, with most shopping still taking place in physical stores.”
Much of the holiday shopping buzz centers on Black Friday, which is now well and truly entrenched in the shopping calendar. According to Mintel research, last year nearly six in ten (57%) Brits browsed for goods during Black Friday promotions, while 41% made a purchase during the event. It’s proving a big hit with the nation’s 25-34s, of whom 75% said they browsed for goods and 62% made a purchase.
While Black Friday has been synonymous with scenes of crowding bargain hunters, last year just 16% of Brits engaged with the event in-store, with the majority of shoppers engaging online (56%). Electrical goods were the most popular purchase, bought by 51% of Black Friday consumers in 2017, followed by fashion, which was purchased by 42% of these consumers.
Overall, half (51%) of last year’s Black Friday shoppers said the majority of the purchases they made during the promotions were Christmas gifts. Meanwhile, a savvy six in ten (61%) Black Friday shoppers said they waited for the Black Friday promotions before making a purchase. However, despite the hype, some cynics remain as 66% of 2017 Black Friday shoppers felt the discounts were not as good as they’re made out to be.
“While Black Friday has become a high profile retail fixture, retailers do run the risk of bringing forward festive spending, but at discounted prices. There is always a fear of missing out, so the actual outcome is the big unknown for how the retail sector will perform this Christmas. Given some evidence of growing disillusionment among shoppers for Black Friday, Mintel predicts that retailers would like to pull back from promotions for this event. We think that this year’s event will be no bigger than last year’s, and that means good news for the amount of money left over to spend in December,” concludes Perks.