That was the Christmas that was

15th January 2019

It hardly seems possible that Christmas is over for another year.  We hope you all enjoyed your holiday – but how was it for the UK high street?  Was it jingle bells all the way or a case of cold turkey?

The run-up to Christmas is traditionally the busiest time of year for retailers.  Many consumers save money throughout the year to finance their festive period, and in 2017, spent an additional £821 per household (source Statista).  Half of that spend typically goes on gifts, the rest on decorations, food and drink and socialising.

Up to 40% of yearly sales take place in November and December, so Christmas is a big deal for retailers. So how did Christmas 2018 fare, given all the high street uncertainties and political upheaval resulting in reports of doom and gloom?

Well, it seems to have been a mixed picture.  The trade body that represents shops, the British Retail Consortium (BRC), reports the worst Christmas for ten years as far as retailers are concerned, with zero growth across the sector.  But that’s not the whole picture, because, within those statistics,  there are some real success stories.

Supermarkets seem to have fared well, especially the budget end of the market, with Aldi and Lidl sales well up on last year.  Tesco also did well – reporting the best festive trading figures for ten years with the spend spread across groceries, clothing and general merchandise.

Department stores were less buoyant.  Troubled Debenhams were well down, as were Marks & Spencer, particularly in food – maybe losing out to the supermarkets mentioned above.  And whilst everyone’s favourite John Lewis showed modest growth, they are being prudent in telling staff they may not be receiving their annual bonus – an almost unheard of event.

Those consumers lucky enough to be in top percentage of earners didn’t hold back especially when it came to luxury cars – more Rolls Royces than ever were bought at the end of 2018 – although we didn’t get one in our stocking!

Online shopping has definitely impacted on high street stores, with 49% of shoppers – many of them Millenials -  reportedly buying at least half of their Christmas purchases over the internet. (Source IMRG).  

Of that £821 per household spent, research by the Royal Mail suggests that around £300 of it was devoted to online.  One barrier to online shopping at this time of year is extended delivery times with 44% of shoppers saying their experience of deliveries is worse or much worse at Christmas.  One way in which the high street can counteract this is by offering ‘click and collect’ where the product is ordered online but collected in store.

But we have to conclude it’s an uncertain time for retailers – poor November and December trading inevitably leads to a taxing January.  According to Helen Dickinson, the chief executive of the BRC, “the retail landscape is changing dramatically in the UK, whilst the trading environment remains tough.”

Whether the flat Christmas will lead to more well-known – and well-loved – brands disappearing from our high streets only time will tell, but we fear that will be the case.