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A cold Christmas ahead? - PC Retail

A cold Christmas ahead?

Analysts and channel bosses divided over the impact of recession on Christmas sales
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Following one of dreariest economic years in living memory, industry watchdogs and channel figures are torn over whether presiding credit woes will overcome the usual buoyancy of the Christmas shopping period, or if the most lucrative buying period of the year will manage to break the current financial malaise.

Whilst not denying times would be harder than previous years, a number of industry analysts have predicted that even the now official recession won't hugely impact the revenue drawn in through Christmas sales.

Jason Evans from Infinite Field Marketing Solutions claimed the general feeling from retail is that there's still reason to be optimistic this yuletide. "Based on feedback from our field marketing teams, I can report that although retail is suffering from fluctuating sales, the general feeling is that it will still enjoy a prosperous Christmas period. There may be less people on the High Street at present; however, those who are making enquiries are more likely to spend – as long as the deal is right."

Analyst GfK thinks that although the market will remain buoyant in terms of sales volume, it may be a little harder taking value. "There will be a significant amount of stock, and there will be a large amount of promotions happening in the High Street, on which, given recent performances, there still is a demand for IT products, certainly by the loyal UK consumer base," said Anthony Norman, business group director.

"However, though you might be selling more, the reveune you'll be getting is a lot less than a year ago. That's going to be something the retailers are going to have to work quite hard on. I don't see it as a huge failure this Christmas – I think it will be quite buoyant in volume terms – but in value, that's where it's going to be more tricky."

The opinion from distribution is similarly positive. Commercial director of distribution giant Ingram Micro Bhavesh Patel added: "From our perspective we have more product lines and segments listed in both High Street chains and retail independents than we have ever had before."

However, others are less optimistic about the strength of consumer demand this Christmas. Brigantia founder Iain Shaw, whose organisation represents over 1,000 independents, said: "The traditional retail trade will be decimated this Christmas, with the multiples being faced with massive margin cuts as they have to heavily discount stocks to shift them. What volume trade that does result will come very late as end-user customers wait to take advantage of final price reductions.

"Indies will fare better than the multiples over the next few months, given their focus on repairs and upgrades as end users attempt to extend the life of their existing hardware and software solutions. They will also benefit from access to heavily discounted stock that becomes available due to pressure on the multiples."

Confirming the pressure the chains are facing, a DSGi spokesperson told us: "It will be a tough Christmas, and we are planning accordingly."

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