Now with a new Prime Minister (yes, another one) ushered in, the economic and political climate in the UK should for the time being calm down and stabilise, we hope, and we can start thinking about Christmas which is just around the corner.
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In the face of a global economic and financial crisis, this year’s Christmas shopping season could be marred by the rising prices as consumers count their pennies. But new research suggests Black Friday sales and the World Cup are expected to boost food sales alongside Christmas gift buying despite the cost of living crisis in November and December.
A new research by KPMG/Ipsos Retail Think Tank (RTT) members suggests that while UK consumers contend with rising energy bills and interest rates, retailers face a "challenging" Christmas shopping period, with the health of the sector seeing its biggest "golden quarter decline" since 2011.
The latest assessment revealed the health of the retail sector is expected to decline by two points to 70 points in the final quarter of this year. (See RTT original report HERE.)
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As reported by Yahoo!Finance on 25th October 2022, that is a drop in Christmas trading not seen since 2011 where growing uncertainty in the European and global markets kept consumer confidence low.
According to the Retail Health Index (RHI), a combination of pressure on margins, rising costs and shaky consumer demand are predicted to produce the difficult trading environment.
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Paul Martin, head of retail at KPMG in the UK commented: "The health of the retail sector continues to slowly deteriorate, and it has been over a decade since we have seen a two point drop in the health index during the vital golden quarter."
The economic and political turmoil are yet to "trickle down" to consumers, according to Martin, who added that while economic and political uncertainty influence the health of the retail sector, the usual festive boost will not be enough this year to counteract the ongoing issues that retailers are facing with rising costs, squeezed margins and fall back in demand.
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However consumers will still want to enjoy Christmas, with many choosing to spend on hospitality and enjoying time with friends and family.
"Many will be looking to trade down, search out bargains and purchase less – but Christmas is by no means cancelled – despite the mood music around an impending recession," said Martin.
But the RTT noted Black Friday (November 25th 2022) sales and the World Cup (November 20th to December 18th 2022) are expected to boost food sales alongside Christmas gift buying despite the cost of living crisis this November and December.
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