Retailers gear up for last-minute Christmas rush

Political uncertainty because of Brexit and the first December general election in almost a century, plus a strong Black Friday at the end of November, are among the factors that have affected trading this golden quarter. However, retailers are gearing up for what they hope will be a “massive” final few days helped by today’s payday for many consumers.

Week-on-week footfall is expected to peak 10% higher tomorrow, ‘Super Saturday’. That will also be up 3% on the same Saturday last year, though that is against a weak comparative.

Retailers are also battling for last-minute online spend. John Lewis, for instance, has extended its click-and-collect order cut-off by 24 hours to Monday.

However, many shoppers are likely to rely on bricks-and-mortar retailers to ensure they get their purchases.

Sainsbury’s head of digital product Michele Swaine said: “We think our biggest Argos day will be Saturday, possibly because not everyone is aware of how last-minute they can push it.

“From a food perspective, Monday is set to be our busiest day, but again it will still be very busy at the stores on Christmas Eve.”

Swaine also noted there is “a chance” this Saturday could be even better than Argos’ “record-breaking Black Friday sales”, which took £60m in one day.

Another grocer mirrored Swaine’s view and said: “We’re expecting a busy few days with the real peak to come on Monday.”

Meanwhile, Pets at Home boss Peter Pritchard said: “What I can say is we expect December 23 to be the biggest trading day and will be as big as this Saturday.”

KPMG head of retail Paul Martin said because Christmas falls on a Wednesday, it gives consumers more time to “fire through their shopping list”.

Even though there are two working days left before the big day, many people will have taken days off to coincide with their children’s school holidays.

One retail boss said: “My sense is that it’s all going to happen from Saturday onwards. A lot of people are on holiday after today and the spend will start to come through as a result of people being off work.”

According to the New West End Company, this weekend should mean footfall hits 1.7 million visitors across the centre of London, a 6% increase versus 2018. Super Saturday is set to be the busiest day of the year, with footfall increasing by 12% in comparison to the previous week.

How are people shopping?

Amid widespread discounting, it remains unclear to what extent profitability will be affected over Christmas. One high street boss said: “The level of discounting has been unparalleled across the board – it doesn’t matter if you’re a department store, in fashion, in homewares.

“Too many people went early [with discounting] and there’s not enough confidence in the market for anyone to hold firm at full price, so they all followed.”

However, another executive maintained: “Our full-price performance has been extremely buoyant, with particularly dynamic performances from certain brands.”

A grocery chief said: “Last year, we saw shoppers being a bit savvier and I think they were conscious of the political and economic situation.

“Going into the last weekend before Christmas, with people getting paid and finishing work, there is everything to play for”

Jessica Shepherd, Debenhams

“It feels as though a bit of that has dissipated now and customers are trading up to our premium food ranges in the way you would usually expect at Christmas and treating themselves in categories like beers, wines and spirits.”

Swaine said: “We know how customers are shopping and we’re not seeing anything dramatically different from prior Christmases.

“They are coming and buying their mince pies. Sparkling wine is going to be very popular. From an Argos perspective, technology is the big one – the Air Pods from Apple, iPhone XR and the Xbox One are the biggies.

“But what we have seen in the past and what we continue to see now is customers trading up and treating themselves.”

General election impact?

Retailers welcomed greater clarity on the UK’s prospects that seems to have followed the general election.

One grocer said: “Customers do seem a bit more confident. I’m not sure to what extent the election result has played a part in that, but they are maybe spending a little more freely than they might have done last Christmas.”

Debenhams digital and international director Jessica Shepherd said: “We had a good Black Friday and have seen an uptick in traffic, both instore and online, since the election. Going into the last weekend before Christmas, with people getting paid and finishing work, there is everything to play for.”

However, another retail executive said he had seen “no big post-election bounce” and the picture will not be clear until January.

Pets at Home’s Pritchard added: “Black Friday and the election has had virtually no noticeable impact.”

KPMG’s Martin said: “The bout of political uncertainty is now seemingly behind us post-election, albeit Brexit is yet to be executed.

“This may well result in a resurgence of consumer confidence for the time being, which in turn will encourage shoppers to finally make the purchases that they may have been putting off in recent months.

“In any case, Christmas is usually a time when festivities trump traditional reason, and retailers will be trying to make up for lost ground.”