Mintel expects total UK retail sales growth of 2.5% in December 2015, taking retail sales up to £42 billion 21% of Brits say they will spend more online for Christmas 2015, down from 25% in 2014 11% of Brits who bought Christmas gifts in 2014 did so on Black Friday With the festive season fast approaching and many retailers ready with their Christmas offerings, Mintel estimates that total UK retail sales will grow 2.5% (including VAT) in December 2015, with sales reaching £42 billion. Richard Perks, Director of Retail Research at Mintel, said: “We’ve been through the worst downturn and financial crisis since the war, but we’ve had a sustained period of growth since 2012. Although there’s no doubt there are problems on the horizon, when looking solely at Christmas, it seems to us that consumer demand is holding up well. Retailers should be satisfied with the outcome of Christmas – it will be good, though not great.” Black Friday’s impact on Christmas sales As many as one in 10 (11%) Brits who bought Christmas gifts last year did so on Black Friday and Mintel estimates that the occasion boosted November’s sales in 2014 by £400 million, £50 million of which were online. “There was a clear message from Black Friday last year. It damaged Christmas gift spending and it took sales away from full priced sales over the Christmas period. As one retailer put it, the genie is now out of the bottle. We think that UK retailers will concentrate on damage limitation from now on, though it is clear that no one feels that they can really ignore Black Friday.” “The big question now is whether Black Friday 2015 will be more or less damaging than last year because that is a very important factor in how much money people have left over to spend on Christmas. We take the view here that it will be no worse than last year. We feel that retailers learnt their lesson and that this year the focus will be more on long term profitability. Even those who were reasonably optimistic after Black Friday realised that whatever their profitability on the day itself, the event hit demand for electricals well into the New Year.” Richard continues. Online present sales stabilise When it comes to online shopping, a tiny one in 20 (5%) say that they do not plan to shop online this Christmas. Yet, whilst in the past consumers have been keen to take their Christmas shopping online, excitement for the online basket is tapering. A healthy proportion (21%) say they will spend more online for Christmas 2015, this however is lower than the quarter (25%) of consumers who said the same when asked in 2014. Overall, 92% of Brits bought gifts for Christmas in 2014. The top gift was clothing or footwear, with three in five (58%) buying these items, followed by perfume, aftershave and toiletries (46%) and toys and games (41%). While 22% bought electrical goods last Christmas, Mintel’s research shows that they proved to be the most expensive item on Santa’s list last year, with Brits who bought electricals spending an average of £172 overall. Consumers also dug deep for cash gifts, with those who gave money presents spending an average of £145. On the other end of the scale, those who bought books spent just £26. Predictions for the coming year in retail “While we can’t ignore the fact that economic growth is slowing and there are uncertainties ahead, at present, with incomes growing and a strong housing market we can be relaxed about the prospects for retailing in 2016. Overall we can look to modest growth in 2016. That said, retailing is changing faster than we have ever known it. This is not just a question of online sales, where growth is beginning to slow; nor is it limited to the growth for discounters.” “The way British consumers shop is fundamentally changing. There is a perceptible shift towards shopping on an as needs basis. This change is playing into the hands of high streets, and they will be the big winners in the retail scene going forward. How retail’s structural changes pan out will be the most interesting feature of the next few years, not the odd percentage difference in the rate of retail sales growth.” Richard concludes. Press review copies of the research and interviews with Mintel’s Director of Retail Research, Richard Perks, are available on request from the press office. You might also be interested in: No related posts.