Britons to spend £86bn this Christmas

Reveals report from Verdict and SAS UK

13 November 2012 - Britons are expected to spend £86 billion on Christmas this year, up from last year, despite having less disposable income, reveals a report from SAS UK and Verdict called How Britain will shop for Christmas.

Retail spending over the Christmas season is expected to be up on 2011 by 1 per cent, driven by food sales which will grow by 2.9 per cent in the last quarter of 2012 compared with 2011. This increase is largely due to rising prices and inflation. However, volumes are expected to contract by 0.2 per cent for total retail spending, with food volume sales falling by 0.5 per cent, meaning discounting will be a major part of retailers' strategies this year. During the festive period major gift sectors such as clothing & footwear, health & beauty and homewares are forecast to grow.

Online sales are set to account for 10.6% of the total retail spend in 2012. The results show that despite the rising importance of online, where spending will ramp up during Christmas, in-store is still a primary buying channel, meaning retailers need to ensure they remain attractive both off- and online.

Online, department stores, supermarkets and discount stores are set to win out this year as convenience, competitive pricing and quality products top consumer priorities, meaning less traction in-store for the high street.

Tablets and e-readers are set to be popular gift items. But tablets are not just for technology buffs anymore, reveals the study. Almost 10% of people who shopped online last year did so using a tablet with this figure expected to rise. Toy tablets for children, or 'chablets', are set to top kid's gift lists, along with new apps-powered Furbies. We will also see a return of traditional toys such as board games, crafts and baking-relating gifts as a result of the 'Great British Bake-off Effect'.

Maureen Hinton, practice leader UK retail, Verdict Research, says, "What retailers need to remember is that tablets will not just be bought but will help people to buy. Those giving and receiving tablets at Christmas are likely also to be using them to shop, and so retailers need to ensure that sites are optimised and offer a good experience."

Cindy Etsell, head of retail, SAS UK & Ireland, comments, "Click and collect and M-commerce will be particularly attractive for the time-pressed over Christmas. And, while spend is up, volume is down and so discounting is expected to be a big part of retailers' strategies. The combination of multi-channel shopping and heavy discounting will increase competitive pressure. And so it's absolutely crucial retailers have analytics technology in place to understand increasingly complex customer behaviours to make the right decisions in real-time on product, price, promotion and placement. Having a single customer view across different touch points will mean retailers can forecast and monitor demand more accurately to at least maintain margins."