Cautious Consumers Delay Christmas Spending

Furthermore,
the
figures
are
not
adjusted
for
inflation,
masking
a
likely
drop
in
volumes
once
higher
prices
are
taken
into
account.

Food
and
drink,
health,
personal
care
and
beauty
products
continued
to
drive
growth,
while
jewellery
and
watches
saw
the
biggest
decline
in
sales
on
the
high
street,
suggesting
consumers
are
abandoning
expensive
presents
in
favour
of
more
budget-friendly
gifting.

BRC
Chief
Executive
Helen
Dickinson
says:
“Black
Friday
began
earlier
this
year
as
many
retailers
tried
to
give
sales
a
much-needed
boost
in
November.

“While
this
had
the
desired
effect
initially,
the
momentum
failed
to
hold
throughout
the
month,
as
many
households
held
back
on
Christmas
spending.

“Retailers
are
banking
on
a
last-minute
flurry
of
festive
frivolity
in
December
and
will
continue
working
hard
to
deliver
an
affordable
Christmas
for
customers
so
everyone
can
enjoy
some
Christmas
cheer.

“Looking
ahead
to
2024,
retailers
will
have
to
shoulder
many
new
cost
pressures,
including
a
rise
to
business
rates,
as
well
as
costs
from
other
new
regulations.

“These
combined
with
the
biggest
rise
on
record
to
the
National
Living
Wage
will
mean
retailers
will
have
less
capital
to
invest
in
lowering
prices
for
their
customers.”

Paul
Martin,
UK
head
of
retail
at
KPMG,
says:
“with
less
than
a
month
to
go
and
sales
growth
limping
along,
the
cost-of-living
crisis
has
taken
its
toll
on
Christmas
spending
for
many
households,
and
the
continued
economic
conditions
are
testing
consumer
resilience.

“With
two
of
the
three
months
of
the
crucial
golden
quarter
seeing
sales
growth
below
3%,
it
has
already
been
a
weak
Christmas
trading
period.”

Martin
added:
“any
excess
stock
not
sold
before
Christmas
could
be
further
reduced
leading
to
big
January
sales,
and
potentially
having
an
even
greater
impact
on
already
tight
margins.

“As
we
look
to
the
first
few
months
of
2024,
we
can
expect
the
challenges
to
continue
which
could
lead
to
further
casualties
in
the
sector,
particularly
pure
online
players
facing
more
than
28
months
of
consecutive
sales
decline.”

In
separate
figures
from
Barclays,
consumer
card
spending
grew
2.9%
year-on-year
in
November
–
just
up
on
October’s
2.6%
–
as
confidence
in
spending
on
non-essential
items
reached
its
highest
level
since
April.

Spending
on
essential
items
was
down
on
October’s
3.9%
growth
to
3.3%
as
falling
petrol
and
diesel
prices
affected
fuel
spending,
down
10.9%.

Growth
at
supermarkets
was
also
lower
month-on-month,
down
to
5%
from
5.2%,
as
food
inflation
eased
and
the
majority
of
shoppers
(67%)
sought
ways
to
cut
their
grocery
bills.

Jack
Meaning,
chief
UK
economist
at
Barclays,
says:
“this
data
suggests
consumers
are
continuing
to
spend
more
but
get
less
for
their
money,
as
spending
growth
remains
below
inflation.

“However,
the
gap
is
narrowing
as
the
rate
of
price
increases
slows,
and
we
expect
it
to
narrow
further
in
the
coming
months.

“It’s
reassuring
to
see
that
some
of
the
previous
weakness
in
spending
was
due
to
unseasonal
weather,
as
shoppers
go
out
and
finally
buy
that
new
winter
coat
and
get
in
the
Christmas
spirit.

“But
the
key
question
for
the
UK
is
what
happens
after
the
holiday
period.
It
will
take
more
than
a
festive
bounce
to
keep
consumers
spending
in
2024.”

source:
PA

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