Consumers To Spend £1.6bn More This Christmas

Retail sales this December are forecast to rise by 4% year-on-year, with consumers expected to spend £42.8bn – £1.6bn more than Christmas 2015, according to analysis from Deloitte, the business advisory firm.

christmas-market-1914651_960_720Significantly, online retail sales are expected to grow by more than a fifth (21%) from 2015, with values likely to surpass £7bn for the first time, a considerable increase from £5.8bn last year.

As a result, December’s online retail sales will account for three-quarters (74%) of total retail sales growth year-on-year. According to recent research from Deloitte, online purchasing (48%) has overtaken instore purchasing (45%) for the first time, and this trend looks set to continue during the festive period.

Retailers are likely to benefit from the fact that Christmas Day falls on a Sunday this year. This means that Christmas Eve, on a Saturday, will be the last full day of shopping for last-minute consumers. Similarly, retailers could benefit from Boxing Day falling on a Monday, meaning a full day of trading hours.

Peter Allen, partner at Deloitte in Belfast, said: “Retailers can expect to receive more than a lump of coal in their stockings this Christmas. Sales prospects for the golden quarter are looking good for the UK retail industry, who will feel an uplift following last year’s disappointing November and December.

Peter Allen, Deloitte UK

Peter Allen, partner at Deloitte in Belfast

“Consumer resilience in Northern Ireland remains high despite growing uncertainty around the impact of Brexit and Trump’s win in the American presidential election. In a low interest rate environment, consumers are still happy to increase their debt to enhance their lifestyle, however it is unclear how long this can continue.”

He added: “Events such as Black Friday and Cyber Monday have dragged forward consumers’ Christmas spending into the end of November. However, there are a number of other factors present that will give a boost to retail sales over the festive period. Christmas on a Sunday will maximise the opportunity for consumers to grab a bargain in the sales that follow.

“In addition, the value of sterling means that consumers are more likely to stay in the UK during the Christmas break. At the same time, tourists’ buying power is greater, and we have already seen the effects of this, particularly in the luxury sector.

“Whilst the economic fundamentals for consumers are still looking healthy, with growing employment and wages, retailers will be wary about what lies ahead in 2017. Consumer confidence will be tested by macroeconomic uncertainty and inflationary pressures. Never will it be more important for retailers to focus on accelerating productivity and profitability. Having robust business models, with an emphasis on delivering the best possible customer experience will be crucial to competitiveness.”

About the Author

Abby Williams
Belfast based author/writer specialising in entertainment, mental health and human interest.