New research suggests that post-Christmas sales could be back in a big way this year due to some retailers being left with more stock than expected after a period of weak consumer demand.
Information from 200 online retailers in the UK gathered by accountancy giant PwC confirms after a disappointing autumn, marked by unseasonably warm and then wet weather, retailers came out en masse and almost 90% discounted over Black Friday. This was similar to the level seen during the second national Covid lockdown in 2020, when non-essential retailers were closed. Participation increased across all categories this year, including some luxury and high-end brands participating for the first time. Black Friday offers also started earlier with around 10% more retailers in promotion mode from early November.
However, while more retailers held sales, PwC noted that the level of discounts was less generous than seen previously, and were typically targeted to specific brands or lines such as winter attire. As a result, some retailers are likely to have entered the run-up to Christmas with more stock than they had anticipated.
PwC stated that with many consumers leaving the majority of their present shopping until December, trading in the last few weeks up until Christmas day will be critical for retailers hoping to cash in on the Golden Quarter. With 7% of shoppers saying that they will do most of their present shopping in the week before Christmas, the tills are expected to be ringing right up to Christmas Eve.
PwC estimates that overall spending on presents and festivities will fall from £23bn to £20bn this year – down by 13% from 2022, with one in six planning to spend less this year. The £20bn figure amounts to roughly £400 per UK consumer – a drop of £40 per person spending from 2022. In addition, 6% more people say they do not intend to spend anything at all this year.
Lisa Hooker, PwC’s Consumer Markets Leader, commented: “As we near Christmas Day, it is all to play for as, whilst Christmas shopping started earlier this year, the majority of presents are still bought in December.
“But if shoppers are right and they do spend less, coupled with weaker Autumn sales and less interest in Black Friday, there could be deeper discounts as retailers clear seasonal stock after Boxing Day. This will be particularly true in categories such as big-ticket, home, DIY, electricals, and toys, which consumers told us were less important to them this Christmas than in previous years. So will shoppers go all out to make Christmas extra special as we saw last year when they spent more than expected, or wait for a bargain post-Christmas?”
NAM Implications:
- Key is how many consumers are banking on this inevitability.
- Either way, retailers will have to clear seasonal stock.
- No matter what it takes, pricewise…
