2013 set to be the strongest Christmas for retail since pre-recession in 2007

UK consumer Christmas spending to increase £2 billion

2013 looks set to be the strongest Christmas for retailers since the recession, as UK consumers are expected to spend £88.4 billion in Q4 – almost £2 billion up on 2012.

The predictions come from the market tracker Verdict, which cites the recovery of the economy, lower housing prices and a reduction in job cuts as large factors in increasing consumer confidence.

“On top of all this,” added Maureen Hinton, research director at Verdict, “during the recession there has been a baby boom which means one of the prime targets for Christmas spending – kids – is growing.”

The £1.95 billion increase (2.2 per cent) on consumer spending in 2012 is expected to largely be centered on food, driven by inflation, homewares, furniture, DIY and gardening sectors are also expected to grow after years of decline. If accurate, the growth will make Christmas 2013 the strongest Q4 for retail since pre-recession 2007.

Verdict reckons £52 billion will be spent on non-food and £36.4bn on food and grocery products.

“Though consumers will still be looking for value and discounting will continue to be rife in non-food sectors, there will be an increase in volumes this year, which will boost their total sales by £600 million,” said Hinton.

Verdict also believes that an increase in convenient delivery options, such as ‘Click & Collect’ services, will occur this year, producing sales of £11.6 billion.

“Shoppers have greater confidence in online retailing now and are prepared to leave holiday purchases right up until just before Christmas,” explained Patrick O’Brien, principal analyst at Verdict.

“This is supported by the rise of Click & Collect services, which will be much more in evidence this year.”

Verdict predicts that Monday, December 23rd will be the busiest day for online deliveries.

“Retailers have rushed to develop and market their Click & Collect services leaving shoppers the convenience of collecting purchases in store instead of having to ensure they are at home at the right time,” said O’Brien.

Retail consultant firm PatelMiller has also predicted a rise in retail spending, estimating that £40 billion will be spent by consumers.

The MD of the Rakuten-owned online retailer Play.com, Shingo Murakami, commented on PatelMiller’s prediction, saying: “With the UK Christmas spend expected to hit the £40 billion mark, it’s encouraging to hear consultancy firms are optimistic for retailers this year."

"However, retailers should also keep in mind that shoppers are still exercising caution with their wallets. Our own independent research has shown that British shoppers are only expected to spend around half of the average spend predicted in 2012."

"Whilst shoppers will always be looking to get as much bang for their buck, price is not the only consideration. In order to make the most of cost-conscious Christmas spending this year, retailers should be looking to drive spend through additional incentives such as reward opportunities, whilst ensuring good value and fantastic customer service at all times to keep customers coming back. Shoppers should also be made aware of any offers through multiple channels; by targeting customers at the right time, on the right device retailers can ensure that they secure those precious festive sales.”

Take a look at Verdict’s infographic below for more details on how Christmas 2013 is expected to be for retailers.Image of Christmas shopper courtesy of Shutterstock.co.uk

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