More than 10.5 million turkeys will be bought by UK consumers this Christmas. Turkey purchases start in earnest from mid-November while more than 5 million will be bought in the last week with 56.5% purchased by men. The research suggests that women send their partners out with lists to save time as they ready the home, wrap presents, prepare party food and organise decorations, leaving men responsible for the tree, drink, Christmas food and present shopping.
"One of the most interesting things to come out of this report is who is doing the Christmas shopping," said Maureen Hinton of Verdict. "The data clearly shows that retailers ought to be actively targeting men, for whom Christmas is one of the big shopping windows. After a tough 2011 many retailers will be relying on Christmas to make a profit before being hit hard by a tough Q1 in 2012. Consumers will cut back as they recover from Christmas spending and face increased utility bills and high unemployment. Therefore retailers must build up enough cash and margin to support them through difficult trading until the next likely boost in spending, Easter."
The report shows that UK households will spend £86.5 billion* in the run up to Christmas, £1.2 billion more than in Q4 last year, but the volume of purchases will be down by 0.7%. Although shoppers will be counting their pennies, spend on food, clothing, footwear, health and beauty will all increase as consumers purchase their Christmas gifts.
Spend on food will increase by almost 4% (3.8%) in 2011 to £33.4 billion, outperforming overall retail growth but only because of inflation rather than sales. Clothing, footwear, health and beauty will also outperform as they are major gift categories due to their relationship to personal well-being.
However, non-food sales will be hit the hardest, shrinking by 0.1% as consumers avoid big ticket items with home related categories expected to shrink by £490 million. (See appendix for a detailed sector-by-sector breakdown.)
Online sales will fare particularly well this year due to the convenience, ease of access and ability to compare prices across different websites.
Spending online will grow to £9 billion which represents nearly 10% of total spend over the holiday period and this increase can, in part, be attributed to the increase in mobile commerce for price comparisons, ordering and checking stock availability. However, this does not account for the influence online has on overall spending with 63% of online shoppers researching online and then buying instore. The increase in online purchases this year is up against a weaker comparative due to the bad weather of 2010 halting the delivery of online purchases.
"UK retailers face one of the most challenging Christmases ever as a combination of low consumer confidence and inflation is making shoppers question every purchase they make, even at a time when they want to celebrate.
All the growth in the market is inflation led and a repeat of last year's bad weather would be disastrous for retailers who are already on very tight margins." continued Hinton.
Cindy Etsell, retail specialist at SAS UK said, "The pressure on retailers this Christmas is unlike anything they will have experienced before. The key for maximising sales is about understanding when consumers are looking to purchase items and ensuring that sales prices are optimised accordingly.
Monitoring customer behaviour is critical for this and the information that retailers have about their customers from till receipts, credit and loyalty cards, and even wider unstructured data from sources like social networks can steer their understanding of purchasing patterns and ability to mark down prices at the optimum time to shift stock without losing significant margins."
© Verdict 2011
*Exchange rate at time of posting: £1=R12.89
Food & grocery
Clothing & footwear
Electricals
Homewares
DIY & gardening
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