Retailers in the U.K. are hoping Christmas food and gift shopping will give a boost to sluggish holiday spending, which slumped in November.
Although, as The Guardian reports, U.K. businesses followed the American tradition of flash sales on Black Friday, which added a 11.8 percent increase in online sales over the previous year, it wasn’t enough to boost the overall month’s performance with in-store and online sales dropping 0.4 percent over the previous November, according to a recent report published by the British Retail Consortium (BRC).
Just like in the U.S., unseasonably warm weather has been blamed for sluggish sales of clothing, winter foods and thick duvets, while the gardening and DIY categories each saw a slight uptick. Another category doing well is home decor and housewares. The BRC’s chief executive, Helen Dickinson, said these categories were the main drivers of growth in November, with appliances performing particularly well on Black Friday.
However, Dickinson noted to The Guardian that sales were still slower than expected, adding, “This buildup to Christmas is one of the hardest to read in years.”
Foot traffic to stores in the U.K. also appears to be down heading into December, with a 2.7 percent decrease in the week to Dec. 6, according to the research firm Springboard.
Springboard’s Diane Wehrle told The Guardian, “Leading into Christmas, we expect to see online shopping continue to make dents in footfall activity.” But Wehrle is optimistic that these numbers will see a rebound from last-minute shoppers, adding, “It is possible we will see that traditional spike in footfall on Dec. 23 as consumers head in store for last-minute Christmas buying.”
Possible explanations for the lag in sales include a consumer market experiencing discount fatigue. Economists noted there was record deflation in November as retailers and shoppers engaged in a virtual game of chicken; as David McCorquodale, head of retail at KPMG, the co-authors of the BRC report, pointed out, each was waiting for the other to flinch.
“November’s relatively flat sales figures are a reality check for the retail sector, with consumers holding off for a Black Friday bargain pitted against retailers determined to hold onto their hard-earned margins,” McCorquodale said.
Taking another look at the figures from the BRC’s report, this time unadjusted for store openings and closures during the year, sales are up 0.7 percent in November. And while this is still below the average growth rate for the last 12 months of 1.7 percent, it is a less gloomy forecast than a decrease in sales. Economists and retailers alike are holding out hope that shoppers will rally and holiday sales will rebound after all.