Consumers to spend £1.6bn more this Christmas has been saved
Consumers to spend £1.6bn more this Christmas
9 December 2016
- UK consumers will spend £42.8bn this Christmas, 4% more than 2015;
- Online sales will rise by a fifth year-on-year, accounting for three-quarters of total retail sales growth in December;
- Christmas Day falling on a Sunday will benefit retailers, with full days of shopping on Christmas Eve and Boxing Day.
Retail sales this December are forecast to rise by 4% year-on-year, with consumers expected to spend £42.8bn – £1.6bn more than Christmas 2015, according to analysis from Deloitte, the business advisory firm.
Significantly, online retail sales are expected to grow by more than a fifth (21%) from 2015, with values likely to surpass £7bn for the first time, a considerable increase from £5.8bn last year. As a result, December’s online retail sales will account for three-quarters (74%) of total retail sales growth year-on-year. According to recent research from Deloitte, online purchasing (48%) has overtaken instore purchasing (45%) for the first time, and this trend looks set to continue during the festive period.
Retailers are likely to benefit from the fact that Christmas Day falls on a Sunday this year. This means that Christmas Eve, on a Saturday, will be the last full day of shopping for last-minute consumers. Similarly, retailers could benefit from Boxing Day falling on a Monday, meaning a full day of trading hours.
Ian Geddes, head of retail at Deloitte, said: “Retailers can expect to receive more than a lump of coal in their stockings this Christmas. Sales prospects for the golden quarter are looking good for the UK retail industry, who will feel an uplift following last year’s disappointing November and December.
“Events such as Black Friday and Cyber Monday have dragged forward consumers’ Christmas spending into the end of November. However, there are a number of other factors present that will give a boost to retail sales over the festive period. Christmas on a Sunday will maximise the opportunity for consumers to grab a bargain in the sales that follow.
“In addition, the value of sterling means that consumers are more likely to stay in the UK during the Christmas break. At the same time, tourists’ buying power is greater, and we have already seen the effects of this, particularly in the luxury sector.
“Whilst the economic fundamentals for consumers are still looking healthy, with growing employment and wages, retailers will be wary about what lies ahead in 2017. Consumer confidence will be tested by macroeconomic uncertainty and inflationary pressures. Never will it be more important for retailers to focus on accelerating productivity and profitability. Having robust business models, with an emphasis on delivering the best possible customer experience will be crucial to competitiveness.”
Notes to editors
Deloitte’s predictions are based on our knowledge of the retail sector and on the average growth trends of the ONS non-seasonally adjusted retail sales, excluding fuel, for the year to date compared to 2015.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.