“Looking back, consumers were in a sweet spot in 2016. Low inflation and rising wages meant there was a little extra in household budgets to spend on the festive period. This year has seen a reversal of fortunes” – Mark Antipof, Visa
Has Brexit already ruined Christmas for retailers?
19 December 2017
The sales figures of 2017 are not promising a merry festive period
The festive season is traditionally a time of celebration for retailers. The three months before Christmas are when many businesses, with their stores bedecked with tinsel and trees, make more than half their sales and profits for the entire year.
Last Christmas was certainly a time of joy and goodwill for UK retail. Despite concerns about the impact of the Brexit referendum vote on consumer confidence and anxiety over the state of the economy, UK sales, according to the British Retail Consortium, rose by 1 per cent in the five weeks to December 31. Barclaycard reported that a 4.8 per cent rise in spend in the fourth quarter was the highest in four years.
Fast forward to 2017 and prospects this time round seem less rosy. Retailers have had a tough 12 months, with rising inflation, increased business rates and Living Wage costs hitting their finances.
There have also been signs of worsening consumer confidence, with GfK’s monthly consumer confidence index noting negative consumer confidence all year.
Research by IHS Markit/Visa predicts that UK retail sales will fall by 0.1 per cent during November and December, with high street stores posting a 2.1 per cent decline, the biggest fall since 2012. However, online sales will hold up well, rising by 3.6 per cent.