- Danielle Wightman-Stone |
Research from Mintel suggests that Christmas retailers are in for a tough December, with forecast growth expected to be less than 2 percent for sales.
Retail sales in December are forecast to reach 44.6 billion pounds according to Mintel, which only represents growth of less than 2 percent, and it adds that retailers can’t rely on Black Friday to boost sales as its analysis suggests its popularity is “past its peak”.
While once a US phenomenon, Black Friday has, in recent years, also become an unmissable event for many shoppers in the UK, however, according to Mintel, Black Friday fatigue may have set in for some. Of those who browsed products during Black Friday but did not buy, over a quarter (28 percent) said that the discounts were not genuine. Meanwhile, of those who bought Christmas gifts on Black Friday or Cyber Monday in 2016, 49 percent said they bought less on Black Friday than they thought they would, while 34 percent bought gifts that they later regretted.
Richard Perks, Director of Retail Research at Mintel, said: “It is likely that 2016 marked the peak for Black Friday shopping. Black Friday has been a major distorting factor in Christmas demand over the last few years and there are some signs of disillusionment creeping in. Discounting in the run-up to Christmas is usually a sign of distress and those who do take part will be retailers who are having trouble selling at full price.”
Mintel suggests Black Friday popularity is “past its peak”
Mintel’s research also reveals that British consumers believe that this Christmas may be more costly than they’re used to. As far back as January 2017, 43 percent of people who bought gifts last Christmas were already worried that the Brexit vote would mean that Christmas 2017 would be more expensive. And Mintel's Brexit-related research shows that concerns over the cost of living have only intensified since then.
Mintel’s Consumer Confidence tracker highlights that financial concern has grown over the past year for many UK shoppers. While in October 2016, 34 percent said they felt financially confident that they’d be OK in the next year or so, this fell to 31 percent who said the same in September 2017. Additionally, in September, 28 percent of consumers said they were worse-off than they were a year ago, this up from 20 percent who said the same in October 2016.
Perks, added: “The natural response to falling real incomes would be to cut back on spending. Added to the tough comparison against last year’s boom, retail sales would be expected to be lower this Christmas. But we don’t feel that we can justify such a negative forecast.
“Retail sales are holding up exceptionally well, even if they are largely financed by increased borrowing. It seems too close to Christmas for there to be a significant fall in spending this year. We also believe that people may well feel that next year will be tough, so they will have a good time now before reality strikes.”
Image: courtsey of Selfridges