UK retail sales to grow 2.5% this December

With the current bout of railway strikes and the just announced post office strikes, one can understand why many of us Brits are shying away from the Christmas high street rush.

A luxury home festive scene set by this plush Claude Armchair in Prussian Blue and matching
 Georgette Footstool In Prussian Blue, both available at Made.com

New research from market intelligence agency Mintel reveals that as many as one in five (20%) Brits are expected to shop online more for this Christmas, rising to 24% of men and 28% of 16-24 year olds. The top three reasons why Brits shopped online for gifts last year were to get cheaper prices (55%), to avoid the crowds (49%) and to shop when it suited them (49%).

According to the new research, Mintel estimates that total UK retail sales will reach £42.2 billion, a growth of 2.5% this December.

Richard Perks, Director of Retail Research at Mintel, said: “When it comes to Christmas shopping, it is increasingly artificial to make a distinction between online and in-store as the two increasingly are working together to suit shoppers’ needs. We are seeing pure players recognise the advantages to having a physical offering, signified by Amazon and Zalando’s interest in moving to the high street. At the same time, a number of high street retailers now price match against online retailers, trying to fight back against the continued belief among shoppers that it's cheaper to buy online.”

Overall, 93% of Brits bought gifts for Christmas 2015. 86% bought gifts in-store and 76% purchased online. Just under one in ten (8%) Brits bought all of their Christmas gifts online, compared to one in five (18%) who bought all of their Christmas gifts in-store.

Richard adds.“The economic background for consumers continues to be favourable. Real incomes are rising and unemployment is falling. There are some worrying signs though. Consumer credit has risen back to record levels and the housing market has weakened a little but overall, the prospects for Christmas remain good.”

Retailers need to adjust strategies to entice savvy shoppers

One of the Christmas-themed shop-windows at Fortnum and Mason on Piccadilly in London.

This Christmas, while UK retailers are trying to recoup up to 80% of their yearly revenues, they are facing tough economic conditions on the high street according to the Office of National Statistics.  Many hope that tomorrow Friday Dec. 20th being the payday will help shoppers make those last-minute shopping decicions.  While the retail environment is also changing fast, many shoppers are opting to buy online as opposed to going to the high street.

One of the Christmas windows at Fortnum and Mason.
Photos by Lucia Carpio.

Dan Wagner, CEO of Powa Technologies says, "The fragile economy has meant that consumers are much more selective about where they spend their money and retailers have been forced to embark on aggressive discounting far earlier to entice shoppers through the door.
"Consumers are much savvier and are actively seeking for the best deals not only on the high street but also via tablets and mobile phones.  Past loyalties can no longer be relied on and retailers need to revise their business strategies to address rapidly changing consumer buying habits," Wagner added.