Despite mounting concerns over the impact of the Brexit vote on consumer spending, researchers at Mintel estimate that total UK retail sales will grow 2.5% this December to reach £42.2bn.
Shying away from the Christmas high street rush, as many as one in five (20%) Brits plan to shop online more 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%).
Richard Perks, Director of Retail Research at Mintel, said: “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.”
He added: “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.
And it seems that Britain’s savvy consumers are keen to grab a bargain, as almost three in five (58%) UK gift buyers agree that promotions available mean that they don’t need to pay full price for gifts, rising to 63% of women, compared to 53% of men.
Black Friday and Cyber Monday kick off the Christmas promotion season. Mintel estimates that in 2015, the discounting days boosted November retail sales by 1.5% to reach £440m. Indeed, one in five (20%) Brits bought gifts online and one in 10 (11%) in-store on either of these days in 2015. Furthermore, of those who purchased on Black Friday or Cyber Monday, 55% bought things that they would normally have waited to buy in the January sales and 26% held off spending ahead of the Black Friday and Cyber Monday promotions.
This year almost a quarter (23%) of UK consumers plan to put off making big purchases until they have seen the Black Friday and Cyber Monday promotions.
Perks concluded: “December 2016’s results will very much depend on what retailers do about Black Friday, but if they cut back on such promotions then there will be a knock on benefit to December, as sales roll over into this month. In 2015, December’s results were weak, partly because of Black Friday and partly because of the unseasonal weather, which seems to have been a constant story over the last year. So the comparisons this Christmas are easier.”