Do retailers need to be nervous this Christmas?
We’ve reached that point in the calendar when we all get to complain about the Christmas ads on the television, and how they seem to arrive earlier every year.
But if you feel that the level of excitement around the ads is muted this time around, you’re not alone. Subjectively, it seems that retailers have sought to calm things down a little, being aware of the fact that it might be a difficult Christmas for many this year.
Hence a slightly ‘anti-fuss’ message from M&S, reassuring us that it’s OK not to follow tradition, and ads from Amazon and the major supermarkets that focus on togetherness (and Michael Bublé at Asda) rather than being a sales pitch for expensive products.
Relatively few ads seem to be encouraging us to spend, spend, spend, as can sometimes feel like the case.
Are retailers preparing themselves for a difficult Christmas too? You can’t argue with the numbers.
Figures from KPMG and the British Retail Consortium show that shoppers are slowing down their spending in the run-up to the holidays. Sales growth – much of which is driven by rising prices due to inflation, rather than people actually buying more stuff – has fallen below its recent average level.
Is this a case of customers holding on to spare cash to spend at Christmas, perhaps waiting for last minute bargains? Or is a case of the pressures of the last few years coming to a head and leaving wallets empty?
Probably a bit of both. With the news full of war and suffering abroad it is easy to forget that the cost of living crisis is still very real for many people at home. Rising mortgage rates, skyrocketing rents, high energy costs and general inflation are all biting.
That cash is tight in many households won’t surprise anybody who works in the UK retail industry. But the scale of the issue might.
The United Nations, no less, has claimed that the level of poverty in the UK breaches international laws, which require that an adequate standard of living is provided for all. Not everybody will agree that poverty in the UK is that much of an issue, but retailers have a vested interest. Put bluntly, they need people to buy their products.
If retailers had any choice in the matter the population would benefit from full employment, high wages and money to burn. That is certainly not the case right now.
Of course, the fact that retailers are so reliant on Christmas is part of the problem. A vast proportion of sales come during the festive season. A bad Christmas will mean a bad year for most retailers. Like a pub near a football stadium that makes all of its money on match days, retailers are reliant on Christmas to balance the books.
On the night before Christmas, finance directors across the land will be anxiously looking through sales figures, hoping that things have picked up in the final few weeks of trading.
Here’s hoping they manage to rescue a merry Christmas.