A report published by Deloitte yesterday brought bad news for the traditional High Street, predicting a fall in spending on Christmas gifts this season, coupled with a rise in spending in large supermarkets.
Deloitte interviewed 1,000 adults for its report, and discovered that they expect to spend 3% less on Christmas presents this year. If the Deloitte report proves prescient then it will mean the first fall in spending on Christmas gifts in ten years.
Mind you the results will only be accurate if the good people of East Anglia prove typical, because that’s where the survey was carried out. It found that the average Christmas gifts bill per adult in the region will fall from £310 to £266. That extrapolates out to a fall to £14.7bn nationally, from £15.1bn last Christmas.
For traditional retailers the report had more bad news. The number of people who expect to carry out most of their shopping at supermarkets rose from 6% to 8%.
Investment and Business News is based near Milton Keynes. The local branch of Tesco has now been expanded yet again - it’s now commensurate in scale to a reasonably sized shopping centre. The town has also recently seen the launch of a new co-branded 109,000sq feet Asda/Wal Mart store. The largest of its kind, it further represents a big move into the world of shopping for everything from the one store.
With retail spending at best only rising very slightly, if the giant supermarkets expand, then something else must give. If the Deloitte report proves accurate, and actually Christmas gift shopping will fall this year, then for the non-supermarkets it seems difficult to predict anything but gloom.
The Deloitte report had some more bad news for traditional retailers. Christmas shopping over the net is set to surge again. The report found 6% of shoppers expect to make at least some of their purchases online, and in all Internet Christmas shopping is set to jump by 50%.
Yet if all this means traditional retailers are set to suffer, and you are looking for examples, then it would appear you should avert your eyes from John Lewis. Yesterday its boss Charlie Mayfield delivered news of a 5.8% rise in sales last week, not surprisingly leaving the store’s MD “feeling positive.” The cold weather is helping, as Mr Mayfield said, “We have the perfect conditions for selling clothing”. He added “I am really encouraged by the way things are coming together.”
Perhaps one should look for that whipping boy of the High Street, Marks and Spencer. Yet here too there’s been good news of late. Profits before tax were up 74.3% in the six months to 1 October, and the company is making all kinds of bullish noises.
So put that altogether and what does it mean? Bad Christmas for the gift market unless you are Tesco, Asda, M&S, John Lewis or an Internet retailer?
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