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Shopping for Christmas 2015
Christmas 2015: quieter, characterised by discounting, online, mobile retailing, and further concerns about Black Friday.
The Centre for Retail Research provided a new independent forecast for 2015, sponsored by RetaIlMeNot and Vouchercodes.co.uk. This covered several countries. This page deals only with the UK
Christmas 2015 was reasonable, but many retailers suffered from the switch to e-commerce and customers' continued passion for discounts. Sales increased by an average 2.3% in 2015 compared to the previous year. We define Christmas as the six week period between mid-November and the end of December. Sales rose by £1.70 bn from £74.26 bn to £75.96 bn. Christmas was marred by unpredictable weather (mild then stormy), floods, and was quite quiet in early December following the manic Black Friday. Retailers who decided to sit out the price cuts lost business (but not necessarily profits) and it proved to be a tough season. One of the surprises was the fact that many of the major grocers had a better Christmas than predicted, although the sales growth achieved by the food discounters was, once again, remarkable. Clothing, which normally expects to do well at Christmas time, was fairly flat although electricals achieved growth.
Christmas Markets. Christmas (or German) markets did well again, but now that there are so many Christmas markets they must be having some effect on retail and hospitality. Information about Christmas markets in the UK and other parts of Europe can be found on our website.
The importance of Christmas
In addition to the religious symbolism of Christmas, its importance to retailers is shown by the following chart. Many retailers make more than half of their sales and profits in the three months before Christmas.
Learning from Experience
In 2013, what went wrong for retailers is that after a good November period and strong sales in the first week of December, retail sales flattened off and did not improve until a few days before Christmas. The post-Christmas sales period (what we used to call the New Year's Sales) was unenthusiastic with trade badly affected by high winds and road congestion.
In 2014, retailers decided to stimulate buying in late November/early December by making a big thing of 'Black Friday', the high discount feature imported from America. There were a series of daily flash sales that generated £850 mn on Black Friday (28 November) and £600 mn on the following Monday (also Cyber Monday). These certainly got people spending, but trade then fell back for the next couple of weeks: some shoppers were awaiting more discounts, others had brought forward spending that would otherwise have occurred in the middle of December. Many retailers were unable to fulfil the online orders made over the Black Friday weekend, or click and collect, and the largest courier firm announced it would cease accepting any more deliveries for a time as it was failing to cope effectively with the work already in hand.
In 2015, shoppers had a lot more money to spend and confidence was higher than in previous years. Black Friday was better organised and became a week of discounts with few of the delivery and IT problems experienced the year before. But after the Black Friday event retail sales slackened off until the fortnight before Christmas: retailers had to put a large proportion of their merchandise on promotion from mid-December to entice shoppers to buy.
Online Christmas Retailing
Online retail rose by 11% in the Christmas period and accounted for almost one-quarter (24.4%) of Christmas spending. Online sales rose from £16.64 bn (2014) to £18.57 bn, Much of this was click and collect. The dynamism of online sellers perhaps explains why Christmas 2015 was such a problem for many stores-based UK retailers.
Online retailing achieved almost one-quarter of all retail spending this Christmas, thus passing another milestone in its (so far) triumphal march through the conventional retail industry.
Multichannel and Negative Growth for Stores
Although 2015 was a better Christmas, sales through stores fell in 2015 by -0.1% in the UK. This fall was not equally shared amongst retailers, and as a result some retailers, particularly in the clothing and footwear categories, were badly affected.
Although many loathe Christmas shopping, most active shoppers love the buzz, the decorations, the crowds and the vast range of products available at Christmas time. Retailers that survive are those that can create that excitement and the thrills of the chase and who make technology work for them in meeting the different needs of discriminating customers. So we are not expecting the whole business of Father Christmas to transfer online any time soon, but it will depend on how well retailers adapt to the new shopping world.
The Mobile Christmas
In 2015 31.6% of Christmas spending (£5.87 bn) was made using mobile technology, both smartphones and tablets. This was a greater proportion than anywhere else in Europe: in 2014 mobile's percentage was only 8.9%.
What did people spend per Household?
Total spending per household £794.39
- Spending on gifts is the biggest item, representing 59.6% of Christmas spending, a small increase compared to 2014.
- Spending on decorations was up slightly.
- Spending on Food and Drink was down again, because food prices were lower and there was some evidence on cutting back on alcohol.
This study covered shoppers and retailers in the UK, France, Germany, The Netherlands, Italy Spain, Belgium and the U.S.. Interviews were carried out by 1000 shoppers in the major countries and with 50+ large retailers in each country (collectively representing 20%+ of national retail sales).