Exclusive: The total spend by UK shoppers is expected to increase 1.8% to reach £86.4bn this Christmas, according to data from Rendle Intelligence and Insights shared with Retail Week.
The increase in spend is forecast despite low consumer confidence, the recent budget, and the fact that this could be a “cautious Christmas” for consumers.
Rendle Intelligence and Insights chief executive Diane Wehrle previously predicted a 3.5% annual uplift in total sales over the festive season due to low inflation, wage inflation and low unemployment, but said the budget has created “fresh challenges for retailers and caused further uncertainty for consumers”.
“I predict consumers will take a cautious approach to Christmas spending this year,” Wehrle added.
“The drop in consumer confidence over the last few months is likely to lead to consumers becoming more price conscious than ever, which in turn may drive greater purchasing over Black Friday in order to secure gifts whilst discounts are available.”
She added that growth in online sales will “outstrip in-store sales” by 3.5%, but 63% of total sales will still occur in physical stores.
Total forecast spend in-store is set to reach £54.8bn while online spending is set to amount to £31.6bn.
While a rise in spending during the peak trading season is anticipated, Voucher Codes has forecast that the largest proportion of the spend increase will stem from shoppers in London and the South East, rising 18% and 15% respectively.
Northern Ireland, the North East and Wales are set to see the lowest spend increase of 2%, 3% and 4% respectively.
Key events
Black Friday is set to be a big event for retail this year due to it falling on payday for many consumers.
Wehrle has predicted that spending will rise by 3% year on year on Black Friday, with in-store sales to increase 2.5% and online sales to rise 3.8% from 2023.
Another important day in the calendar is the Saturday before Christmas, also known as “Super Saturday”, which is usually a day when shoppers spend on gifts.
Falling on December 21 this year, Wehrle anticipates total spending to be 22% higher than on the same “Super Saturday” last year (December 23 2023).
Data from Beauclair shows despite most stores being closed, 21% of spending on Christmas Day took place in-store across the likes of independent and convenience stores. Online spend totalled 79% of Christmas Day purchases.
Wehrle believes this will stay pretty much the same this year, with 20% of sales occurring in-store and 80% online on Christmas Day.
Boxing Day, which used to be a huge day for sales, is now likely to be surpassed by consumer spending on December 27 instead.
Rendle Intelligence and Insights says this could be due to the likes of John Lewis and M&S closing on Boxing Day and Beauclair’s data supports this as in 2022 and 2023, spending on December 27 was 43% higher than on December 26.
Wehrle now expects in-store spend on December 27 will be 72% higher than Boxing Day, and online spend will be 30% higher.
No comments yet