London / UK. (mi) While Christmas 2020 will be challenging for retailers and consumers alike, latest research from Mintel market research reveals that most Brits are striving to have a good festive period with their spending predicted to decline by just 0.4 percent compared to 2019.
Mintel expects retail sales in both November and December (both in-store and online food and non-food) to hit GBP 81.7 billion, declining just 0.4 percent compared to last November and December when sales reached GBP 82.0 billion. Sales through non-food retailers this November and December are expected to reach GBP 33.3 billion. Online demand has soared since the Covid-19 pandemic, and is expected to make up a record level of sales during the Christmas period. Half (51 percent) of consumers say they plan to buy more Christmas gifts online this year, rising significantly among those aged 16-34 (58 percent) and falling a little among those over 55 (44 percent). Overall, Mintel estimates that internet pure players (online only retailers) will account for GBP 15.7 billion worth of sales in November and December. This comes as almost three quarter (72 percent) of Brits plan to try to limit time in crowded areas before seeing their family at Christmas.
And it seems the festive period is proving to be more important than ever as 77 percent of grocery shoppers say it is important to have a good Christmas after the events of 2020.
Nick Carroll, Associate Director of Retail Research at Mintel, said: «The Covid-19 pandemic has polarised consumer finances. Some have been able to work throughout the outbreak and have seen some outgoing costs, such as travel, reduced, but many have seen incoming costs reduced, through furlough or lost jobs due to the pandemic. Irrespective of the scenario, households find themselves looking toward the uncertainty of 2021, particularly with the end to Government intervention in the job market. As a result, consumers have been less willing to spend since the pandemic hit and these fears will naturally be at play in the background of this festive period.
«However, the festive period is, for many consumers, a time to forget their worries and celebrate with loved ones, and few years have limited consumers’ ability to do both like 2020. As the rules will be relaxed a little for the festive period, customers will be wanting to make this Christmas as special as possible and purse strings are likely to be released more than they have been so far in 2020. Value will remain crucial but those that have been able to save during the pandemic may look to release some pent-up demand; while those who have been impacted financially will do what they can to ensure they can still make this festive period special.»
Online retailers get set for a record Black Friday
Over two in five (42 percent) Brits say concerns around product availability means they plan to start their Christmas shopping earlier this year. The reality is, however, even if significant demand is pushed forward, a large portion will still fall into December and the weeks before Christmas Day. Indeed, last year, whilst 73 percent of shoppers had started their gift shopping before December, 46 percent spent the most during December itself.
Nick Carroll, Associate Director of Retail Research at Mintel, said: «Naturally, with non-essential stores closed, online will be gift buyers’ only avenue in November and this will mean that Black Friday will be bigger than ever, at least online, in 2020. Mintel estimates online sales in November will account for 37 percent of all sales and grow by 58 percent year-on-year. Stretching Black Friday away from just the weekend itself has been a trend for a number of years, but it will be crucial this year. However, the reopening of stores in the first week of December may also cause a rush of pre-Christmas demand, and retailers will need to prepare for how to serve this safely.»
Young shoppers turn to credit option
Half (49 percent) of consumers say that concerns around their household finances mean they will have to keep to a stricter budget this Christmas. With concerns around the future and pressure on household incomes, one in five (19 percent) Brits plan to put more on credit this year rising to 35 percent of 16-34s.
Nick Carroll, Associate Director of Retail Research at Mintel, said: «Spreading out the cost of Christmas is not a new need and from retail-based credit options to personal credit cards, there is no shortage of options. This level rises significantly among younger shoppers, given this group has been, in terms of furloughed roles and job losses, harder hit than other generations, and the higher savings ratio of older consumers. Platforms that already serve a younger audience, such as those offering a buy-now-pay-later digital service, may see a significant boost this Christmas and retailers who offer such services may see a boost to trading.»
Shopping with a heart
Finally, highlighting Brits’ belief in the season of goodwill, over half (55 percent) of 16-34s agree that gifts with an ethical/charitable benefit will be particularly important this year; this compares to an average of 46 percent of all Brits.
Nick Carroll, Associate Director of Retail Research at Mintel, said: «The pandemic has meant most shoppers will not have spent as much time with friends and family over the year as they usually would have. From a gifting angle, this will then put a greater onus on presents being more thoughtful and less »throwaway« than they potentially have been in the past. Personalised gifts, experiences to look forward to in 2021, and other gifts which convey more meaning will be key.»