Some jingle and sparkle: Mintel forecasts a steady retail Christmas

November 22, 2019

Despite a particularly tough year, 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 in the battle between the clicks and bricks, Mintel estimates that internet pure players (online only retailers) 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.

Nick Carroll, Associate Director of Retail Research at Mintel, said:

“We’re forecasting that December will result in steady growth for the retail sector. 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, of course, 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.

“Despite this, the past few festive periods have shown that customers can be resilient in the face of uncertain times and we believe underlying demand will hold up reasonably well. Customers will, of course, be looking for value, and with fewer days between Black Friday and Christmas this year retailers’ margins may be particularly stretched.

“Although high-street retailers may be under pressure, over-half (53%) 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. 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

Love it or loathe it, Black Friday is now fully ingrained in the retail calendar, and according to Mintel, 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 just under three in ten (29%) bought in-store. Amazon was the most popular destination, with 42% of Black Friday buyers shopping with the online giant during the event.

Overall, 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, seven in ten (67%) Black Friday shoppers bought something as a Christmas gift. While six in ten (58%) say they delayed planned purchases until the event, highlighting how disruptive Black Friday can be to trading either side of the sales bonanza.

Nick Carroll, Associate Director of Retail Research at Mintel, said:

Black Friday is here to stay, and we expect it to be potentially the biggest it’s ever been in the UK. Unlike in recent years, Black Friday 2019 falls right at the end of the month – after payday and less than four weeks before Christmas. This makes perfect timing to capitalise on shoppers who are looking to save during this uncertain period.

“Whilst we would expect certain key players to continue to abstain from the event, given the online-only retailers’ enthusiasm for Black Friday, for many the fear of losing sales in today’s highly competitive market means they have to be involved. There are a number of retailers already running their Black Friday promotions, hoping to get out ahead of the pack and capture demand before the event gets into full swing.”

Krishan Rama
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