Verdict predicts Christmas cheer for retailers

Published:  25 October, 2013

Retail research specialist Verdict is forecasting that Christmas 2013 is set to be the best Christmas since the recession started, with consumers spending at least £2bn more than in 2012.

A number of factors are coming together to give retailers a much-needed boost. Consumer confidence drives spending and shoppers have far more reasons to be cheerful this year.

At the same time the economic news is more positive; the housing market is moving with further initiatives being introduced to encourage buying; job creation is outpacing cuts; and even though PPI refunds and the Post Office flotation do not affect everyone they have a further halo effect of boosting the view that, at last, the econommic backdrop is getting better.

“On top of all this,” Maureen Hinton, research director at Verdict, added: “during the recession there has been a baby boom which means one of the prime targets for Christmas spending - kids - is growing.”

Food is usually the main focus for Christmas spending but this year Verdict is forecasting that the hard-hit non-food sectors will recover. It expects to see growth in the home-related sectors of homewares, furniture, DIY and gardening after years of declines. Though food continues to be mainly driven by inflation (of its 3.8 per cent growth, 2.9 per cent will be from price inflation) volume growth in this will increase too.

Hinton added: “Though consumers will still be looking for value and discounting will continue to be rife in the non-food sectors, there will be an increase in volumes this year, which will boost their totall sales by £600m.”

Overall, Verdict is forecasting spending in the fourth quarter of 2013 will reach £88.4bn, of which £52.0bn will be spent on non-food and £36.4bn on food and grocery. This represents an increase of 2.2 per cent on 2012 and an extra £1.95bn for retailers to fight over.

And Patrick O’Brien, principal analyst at Verdict, forecast that growth in click & collect will ensure online is Christmas 2013’s star channel, producing sales of £11.6bn and year-on-year growth of 12 per cent.

He explained: “Shoppers have greater confidence in online retailing now and are prepared to leave holiday purchases right up until just before Christmas. This is supported by the rise of click & collect services, which will be much more in evidence this year.

“Retailers have rushed to develop and market their click & collect services, leaving shoppers the convenience of collecting purchases in store instead of having to ensure they are at home at the right time,” he concluded.

As a result Verdict is predicting that consumers will have the confidence to leave their Christmas spending to the last minute knowing they are in control of collecting their online purchases. And this will lead to Monday December 23rd - which Verdict is calling ‘Mad Monday’ - being one of the busiest days ever for online purchases.

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