Festive spending is continuing to move away from traditional high street retailers, with discounters predicted to pick up a significant percentage of spend in the final days of pre-Christmas trading.
A recent survey by shopper analytics firm RetailNext showed that consumers in the UK plan to switch 36% of Christmas spending budgets from traditional high street retailers to discount brands, such as Lidl, Aldi, Home Bargains and B&M, rising to 41% amongst Millennials.
While recent data from PwC predicts that retail spending on gifts and Christmas celebrations will rise 5% year-on-year – the first-time consumers will outstrip festive spending since 2021 – shoppers are expected to continue to express value-based buying tendencies, making them mindful about where they spend and intensifying discounter switching.
Gary Whittemore, Head of Sales EMEA & APAC at RetailNext, commented: “While the acute pressure on household spending appears to be easing, shoppers aren’t simply snapping back to pre-cost of living spending habits. Having learnt savvy and thrifty shopping hacks, consumers have redefined their concept of value. And this is bearing out in expected share of wallet for Christmas, with discounters’ retail offers, such as Aldi’s middle aisle, likely to benefit from these value-driven buying behaviours.”
This changing of the guard can be seen in the key anchor stores driving footfall to retail parks in the run-up to Christmas. While M&S topped the key anchor stores that would drive Christmas shoppers to visit retail parks or out-of-town shopping destinations (42%) in RetailNext’s poll, this was followed by brands such as B&M (41%), Home Bargains (38%) and Aldi (32%).
NAM Implications:
- Hopefully no surprises here, given the continuing cost of living constraints.
- And the Budget increased costs that are yet to emerge…
