‘At Christmas most people shop with their hearts and if they can spend, they will’

In my last opinion piece of 2024, I thought I’d spread a bit of Christmas cheer. As we head into the final critical pre-Christmas shopping days, it’s worth reflecting on the Christmas trading ghosts of retail’s past. There will, of course, be triumphs and casualties – mostly predictable but broadly speaking, the golden quarter is very rarely a disaster.

I know that because this week I trawled through the Retail Week archives, and came across a piece I’d written in 2007 tracking the accuracy of analysts’ pre-Christmas hypothesising on every golden quarter since the turn of the millenium. The summation is that any catastrophising – and there has been a lot over the years – hardly ever rings true.

“The point is, it takes a lot to dampen shoppers’ festive spirits”

Take 2002, for instance. The CBI released its retailing survey showing that Christmas sales were static for the first time in 10 years. In the event, total sales climbed by 4.2%.

Then there was 2005. Terrorist threats provided a disturbing undercurrent throughout the year and consumer confidence was precarious thanks to rising council tax and utility bills. By November, the London Retail Sales Monitor showed a 2.3% fall in comparable sales for October. By December, the mood had darkened in keeping with the winter nights. Many warned it would be the worst for many years. It wasn’t. Total sales climbed by 6.2% – the best numbers since May 2004.

And so it goes on. Perhaps the most famous doomsayer was the late Richard ‘Ratty’ Ratner at Seymour Pierce. Based on not a lot, it seemed, he decided 2006 would be the worst for a quarter of a century.  In fact, while it wasn’t stellar, like-for-like sales rose by 2.5% and total sales climbed by 4.4%.

The point is, it takes a lot to dampen shoppers’ festive spirits.

If we all shopped with our heads, most of us – from the wealthy to the cash-strapped, could write a long list of reasons why we should curtail festive spending and do just that.

“There will be fallouts but, as always, it comes down to the fundamentals of retail: great product, great service, well priced”

But when it comes to Christmas, it seems the majority shop with their hearts. If they can spend, they will. For the lucky ones among us, it’s the sentimentality associated with Christmas that influences us most in the purchase-making moments.

The joy of giving, of showing you love people, and the promise of time with family and friends. These are the triggers that win shoppers’ hearts. Emotions kick good intentions of strict budgets into the long grass, and it’s the ‘oh, go on then’ purchase mentality that probably tips every year into a ‘better than expected’ outcome.

What’s in store this Christmas? So far, so positive. PwC’s festive predictions survey indicates that UK consumers are expected to spend £22.7bn – a 5% increase year on year. It says that consumers’ net spending intentions are more positive this Christmas than in 2023 and 2022 across all major categories.

Let’s all hope this isn’t the year to buck the trend. There will be fallouts but, as always, it comes down to the fundamentals of retail: great product, great service, well priced. Behind the scenes, the successful ones will be those with strong strategies, operations and company cultures.

We know that next year will present many challenges – the impact of the recent Budget being the main one – but history also suggests the industry has a good track record of weathering storms.

Happy Christmas.