The first sets of Christmas trading results have started to trickle in this week and by all accounts Christmas 2009 is unlikely to have been the disaster that everybody was expecting.
In Germany early indications suggest retail sales for the Christmas period were down 1.5%, while in the US, retail sales during the Christmas week were up 2.3%. Admittedly any comparisons will be made against a disastrous 2008, but over the next few weeks the message will hopefully be positive.
One factor that will certainly contribute to higher festive sales is the lack of pre-Christmas discounting in 2009. With retailers working tirelessly throughout the year to reduce inventory in their stores there was no need for them to discount excess stock, therefore revenue should be higher than last year.
Stock reduction had a knock-on effect for the January Sales period and not necessarily the positive one the consumer was looking for. With less stock to shift, retailers have been able to condense the Sale period into the week between Christmas Day and New Year’s Day. Across the globe consumers have been bemoaning the lack of bargains on the shelves and this could be a sign of things to come in the future.
With lots of space to fill in their stores, full spring collections have appeared on retailers’ shelves earlier than ever.
The grocers have already started launching their Easter ranges. The thought of seeing vast displays of chocolate so soon after Christmas is enough to make anybody’s stomach turn, so it will be interesting to see how consumers take to having the Spring season forced upon them in the first week in January.
The likely outcome is a slow start to the year. Consumer confidence is still not sky high, the US consumer confidence index was up from 50.6 in November to 52.9 in December, but this is still very low. A tightening of belts is almost inevitable and the first three months of the year could be pretty bleak for retailers in all sectors.
Looking beyond the start of the year, Halloween and Christmas 2009 have given strong indications of how retailers will behave in 2010, particularly in the US.
Heavy focus will be placed on seasonal events, with consumers spending heavily around dates such as Valentine’s Day and Easter. Outside of these times consumers will hold back and retailers in sectors such as clothing will have to work hard for their cash.
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