It would be fair to say the Christmas season is the highlight of the year for retail businesses. Many businesses rely on the next 3 months as the backbone of their balance sheets, yet many more sit back and anxiously await the results as they come in. We’re here to take a little of the guesswork out of it and give you a clearer vision of what’s to come and most importantly, how you can ensure a successful Q4.
Last year we enjoyed our first (almost) COVID-free Christmas in years. Generally, results across the industry far exceeded expectations as fuel, inflation and supply chains were all under extreme stress. Here are some of the key headlines:
Overall, Christmas 2022 was a surprising success for the retail sector, with many key retailers exceeding expectations, however upon digging deeper 2022 wasn’t an out-and-out success. Similarly to the economy this year, its low expectations and too many assumptions made objectively mediocre results shine brighter.
Much like the economy, the retail industry has experienced constant ups and downs this year, none of which have been particularly drastic. Latest reports show sales volumes dropping 1.2% in July; this followed a small rise in June. This stands out as a vastly positive outcome considering what was predicted for the economy this year. Some of the latest key points from the year so far:
Fortunately, the theme of 2023 has been closer to stagnation than serious recession. Marginal ups and downs with a steady upward trend mean we arrive at Q4 in a better place than last year. The picture is notably grey, neither outrightly positive nor negative. As discussed, sales were bolstered by sharp inflation during the Christmas season last year. With the rate now remarkably lower than this year, it’s worryingly likely we’ll see a decrease in sales figures. Looking at the bigger picture, economic conditions are far more comfortable than what we were feeling this time last year. Attitudes in some demographics reflect this, with 72% of young, unburdened people intending to spend more on gifts this year. Equally, other groups feel differently: reports show 18% intent to spend less than usual on Christmas this year. Not only having insights like these but knowing how to utilise them is fundamental to your success this winter.
It’s as much about who you target as how you target; out-and-out blind advertising will only get you so far. We can help you assess your products/services and reimagine the way you present these to your customers. Considering consumer attitudes during tough times, we will safeguard your sales against penny-pinching and construct a strategic foundation you can build on.
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KNIGHT FRANK – UK retail: Christmas 2022 – a triumph over lazy assumptions
KPMG – Christmas Trading Report
ONS – Retail Sales, Great Britain
KANTAR – Christmas 2023 spending intentions
BAUER – Insiders Christmas Survey 2022