Retailers braced for ‘subdued’ build-up to Christmas
It is widely expected that the cost-of-living crisis will lead families to dial back their festive spending this year.
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Your support makes all the difference.Retailers are braced for a subdued last few days of build-up to Christmas as households bear the brunt of energy and economic shocks.
Analysts Springboard said the declines from month to month from September to November and then just a modest predicted rise this month would eradicate the gains made over much of this year.
Diane Wehrle, insights director at Springboard, said footfall would rise in all three destination types from November to December, although would be “more subdued than in previous years” – by 4.5% in high streets, 5% in retail parks, and 10% in shopping centres.
Retailers are well aware that in the current environment it is a battle to attract and retain every customer
British Retail Consortium chief executive Helen Dickinson said: “Despite facing huge cost pressures, retailers are doing all they can to keep prices affordable for all their customers.
“But the cost-of-living crisis means many families might dial back their festive plans.”
Paul Martin, UK head of retail at KPMG, said retailers would be hoping that consumers continued to focus on the “Christmas feel-good factor”.
He said: “Retailers are well aware that in the current environment it is a battle to attract and retain every customer.
“Given the economic headwinds for the year ahead, with consumer behaviour expected to evolve further as shoppers look to trade down and purchase less, understanding and meeting customer needs will be mission critical for retailers, and it’s a job that keeps getting harder.”
Myron Jobson, senior personal finance analyst at Interactive Investor, said: “The cost-of-living squeeze on budgets is also set to hinder sales volumes this month in the lead up to Christmas. The challenge for retailers is to select the right strategy for their business to retain cost conscious shoppers.
“Companies are grappling with their own soaring costs fuelled by a range of factors including high labour costs, soaring energy bills and post-Covid supply bottlenecks. They have to decide how much of this to absorb and how much to pass on to shoppers.
“With inflation hitting a new 40-year high last month and the spectre of higher interest rates to tighten the screws on skyrocketing prices, shoppers will likely continue to reshuffle their spending priorities and allocate more of their budget on everyday essentials.”