Mintel forecasts a steady retail growth for Christmas

Despite a particularly tough year, Mintel forecasts some Christmas cheer for Britain’s retailers.

Latest data from the market research firm predicts that December’s retail sales will reach £48.7 billion, growing 3.8% compared with last December when sales hit £46.9 billion.

Sales through non-food retailers this December are expected to reach £23.9 billion (including £4.2 billion from online sales generated by physical stores), while food retailers will enjoy sales of £18.8 billion (including £1.4 billion from online sales generated by physical stores). And in the battle between the clicks and bricks, Mintel estimates that internet pure players (online only retailers) will account for £6 billion worth of sales.

Mintel forecasts total online sales this December will be worth £11.6 billion, accounting for 23.7% of all retail sales.

Nick Carroll, associate director of retail research at Mintel, said: “We’re forecasting that December will result in steady growth for the retail sector. In normal circumstances, with the current low unemployment and solid wage growth, this would point to an even better Christmas than in past years. However this has, of course, been far from an ideal run-up, with Brexit uncertainty dragging on and an election now a late additional hurdle for the sector to pass and process before the big day.

“Despite this, the past few festive periods have shown that customers can be resilient in the face of uncertain times and we believe underlying demand will hold up reasonably well. Customers will, of course, be looking for value, and with fewer days between Black Friday and Christmas this year, retailers’ margins may be particularly stretched.

“Although high street retailers may be under pressure, 53% of shoppers think visiting stores is a good way to get into the festive experience. Therefore the run-up to Christmas is a great opportunity to get shoppers into stores and enthused about the physical shopping experience. Those that can provide valued experiences whilst tapping into other underlying trends, such as local sourcing and ethical production, combined with attracting value-conscious shoppers, put themselves in a good position this festive season.”

Consumer research for Mintel’s Christmas Gift Buying UK 2019 Report was carried out among 2,000 internet users aged 16-plus in December 2018.

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