Mintel expects total retail sales growth of 3% in December 2014, taking retail sales up to £36.5 billion. Non-food retailers will see growth at 3.5%, whilst food retailers are expected to be up by less than 2.5% in December 2014. Low inflation in food prices – in part the result of strong price competition – will be a depressing force for value growth in the grocers sector at Christmas 2014. Nearly 13% of all retail sales will be online in December 2014, reaching £4.7 billion. A quarter (25%) of Brits said they will be shopping online more for Christmas 2014. In anticipation of Christmas 2014 Mintel’s Director of Retail, Richard Perks, looks ahead to the fortunes of on and offline retailers. “There are several reasons to expect retail sales growth in December 2014 to be slightly more modest than we saw last year; whilst consumer confidence has trended upwards there are signs of a recent faltering in this upward movement and the prospect of interest-rate rises is likely to prompt renewed caution among mortgage holders. Additionally, in terms of value, lower inflation will depress retail sales. Overall, the strong retail growth that was seen last Christmas will make the comparatives demanding.” Christmas cheer comes to non-food retailers Christmas retail spending is split into two main elements: goods and gifts. Mintel’s Christmas 2014 Predictions, Retail sales, by type of retailer “We expect year-on-year growth to be slightly more weighted towards non-food retailers – from specialists such as clothing and electricals stores, to general retailers such as department stores. Further to this, price competition among major grocers is pushing down inflation in food prices and this will be a depressing force on spending through food retailers in December 2014.” “In addition, we expect sales through food retailers to be up by less than 2.5% year-on-year in December 2014. Non-food retailers will see stronger growth, of around 3.5%, helped by some displacement of spending from food to non-food categories.” “Grocers are also likely to be hit by shoppers migrating away from large superstores: fewer non-food purchases, including impulse buys, will be made from grocery superstores. So non-food retailers, such as specialists in clothing or beauty and department stores, will have greater opportunity to snap up these purchases.” A quarter of consumers plan to shop online more this Christmas “The internet tends to out-perform at Christmas as consumers turn to the internet when they need to do ‘shopping-list’ shopping – when they are buying for themselves, browsing in-store is more of a pleasure. Mintel’s consumer research backs up our expectations of a strong performance for online sales, with a survey in January showing that fully one-quarter (25%) of consumers are planning to shop online more at Christmas 2014 than at Christmas 2013.” “On top of this, our recent E-Commerce report found 41% of consumers are shopping via smartphones and 35% are buying via tablets. Mobile devices are making it easier for consumers to shop anytime, anywhere, and this is bolstering growth in internet sales.” “Whilst online retail sales will be up by around 14% year-on-year, store-based retailers will account for the majority of these internet sales.” Mintel’s Christmas 2014 Predictions, Online sales, by type of retailer “Mintel predicts that the large majority of retail sales – nearly £32 billion in total in December 2014 – will be offline and a further £4.7 billion of retail sales (13%) will be online in December 2014. Given the strong growth in internet sales, and 3% growth in total retail sales, this means there will be very minor growth in offline sales: sales through physical shops will be up only around 1.5 to 1.6% year-on-year.” In Summary “There are several reasons to expect value sales growth this Christmas to be unspectacular. Stores continue to dominate Christmas shopping – the large majority of December 2014 retail sales will be offline and even online, store-based retailers will take the majority of sales. But as in-store sales growth will be weak, internet transactions will be surging.” Interviews with Richard Perks are available on request from the press office. You might also be interested in: No related posts.