Last week saw the first announcement of Christmas on Oxford Street bunting. Selfridges launched its Christmas shop back in July – 147 before the Day itself. So what will trade be like this year? Everything is measured year-on-year so one has to look at 2016 to start.
The ONS says Christmas 2016 boomed. Year-on-year sales by value were up a massive 6.8% (just 0.1% inflation) to give the best Christmas increase for a generation. Don’t worry if this sounds seriously at odds with your own company’s experience – I don’t believe the figures either! The ONS retail sales data are often at odds with reality, or anecdotal evidence. What is clear however is that last year followed a particularly weak 2015 which in turn followed an unspectacular 2014. So while the reality is that records were not close to being broken in 2016, the comparatives were very weak and last year was probably up 3.00 – 3.50%.
ONS data shows 2017 year-to-date sales by value averaging 4.6%, or 2.5% once inflation is stripped out. Again, best treated with a large pinch of salt. However, interest rates are likely to be on the rise finally and although the increase will be very modest, I’m not sure the impact on sentiment will be. Many younger consumers have only lived with minuscule interest rates and have taken on quite a bit of very cheap debt. Brittle consumer confidence coupled with almost unprecedented political uncertainty encourage caution.
Last year’s demanding comparatives will make this Christmas very tough, with little genuine growth around. Last year, Christmas week saw 88% of non-food retailers on sale. With sales growth thinner on the ground it is hard to see this not being repeated. Christmas will certainly not be cancelled, but with rising rates, falling confidence and discounts almost everywhere, it will disappoint many retailers.
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