Pre-Christmas Retail Trends
Retail week reported a drop in sales before Christmas with many retailers complaining that Christmas had come later than ever, however non-food Christmas sales saw a large increase online.
A survey carried out by The British Retail Consortium (BRC) showed overall retail sales in the UK increased by a mere 0.4% based on a like-for-like basis during December. Inevitably, some companies suffered more than others. Marks and Spencer reported a 0.2% decrease in like-for-likes in the last 13 weeks of 2013. This was partly due to a warmer than usual October resulting in less purchasing of winter clothing. Next wasn’t effected so badly and this high street and online store reported pre-Christmas successes.
It has been noted that footfall was high in the week before Christmas and of course, retailers aimed to cash in on this. Many stores risked profits by slashing prices before Christmas, but sales were still lower than hoped. Retail Week claimed the seasonal food sales were the worst they had been for 5 years with food like-for-likes being 0.6% lower on average during the three months leading up to December. Richard Lim, the head of business information at the BRC described the pre-Christmas food sales as “pretty awful” citing the lowest food price inflation since June 2010 as part of the problem.
However, the pattern regarding food sales wasn’t universal as some companies thrived in this highly competitive market. Marks and Spencer stated food sales were up by 6.1% during the 3 weeks that preceded January 4 2014. The food market seemed to be operating between 2 extremes over the Christmas period. Aldi’s festive sales were at a record high, with suggestions that middle income households were searching for cheaper food whilst the higher end food market did well with Waitrose claiming record Christmas sales.
The more consistent Christmas success story took place on the net with online growth rocketing. Web sales saw the highest rise for four years with an increase up to 19.2% in December 2013 compared to the same month in 2012. The online sales for John Lewis accounted for almost one third of all its revenue over the Christmas period which is a huge boost for this retailer given that nearly £1 in every £5 spent went on online sales.
Though etail sales were high, footfall on the high streets wasn’t as disappointing as might have been expected. It is possible that customers found items in stores on the high street then searched on line for cheaper deals.
Even though many bricks-and-mortar retailers are struggling against etailers, customers often enjoy the experience of shopping on the high street and seeing items before they purchase. The way forward is for businesses to enhance this experience for customers whilst nurturing their online presence in 2014.
Many retailers suffered during the run up to Christmas 2013 with overall like-for-like sales at just 0.4 percent higher than the previous December. However, it was a different Christmas story for web based sales and retailers with a pro-active online presence were much more successful. Survival in retail seems to lie in combining a strong online presence with attractive bricks and mortar stores on the UK high streets.