£14bn Boxing Day sales ‘tough for high street’
SHOPPERS are expected to shun the high street for the internet today as in-store Boxing Day sales are forecast to fall for the third year in a row, says a new report.
Between today and New Year’s Day an estimated £14bn will be spent across the UK, according to VoucherCodes.co.uk and the Centre for Retail Research – but £3.25bn of that is expected to be spent in-store, a decrease of 12.4% when compared to last year.
Last year, in-store sales were down by 6.5% on the 2017 spending total in an emerging trend that has prompted some retail experts to question the future of the Boxing Day sales.
David Hughes-Lewis, former member of the Cardiff Retail Partnership and an independent retailer in the city, said people were getting “tired” of the sales by the time Boxing Day arrived.
“The sales started in mid-December,” he said. “Years ago, it used to be the January sales, but they don’t seem to exist any more.”
Professor Brian Morgan, a professor of entrepreneurship at Cardiff Metropolitan
University, said: “We’ve had Brexit and really bad weather, and the high street is really suffering due to online sales.
“People are seeing the internet as a natural way to shop nowadays. We are inundated by ads online that we just have to click through and it’s difficult to see how the long-term trend of the
declining high street will get any better.”
He added that despite a period of “heavy discounting”, there had been very little growth in retail sales in the run-up to Christmas, and that the high street’s demise was indicative of a much longer-term trend rather than simply low confidence in the economy.
“Consumer confidence is reasonably high as we have low unemployment and people are quite positive about their finances,” he said. “People are just not responsive to 25% off any more. People don’t rush in any more to make a purchase because they realise price visibility and transparency is greater than ever thanks to the internet. They can just go online and check prices, which had been unheard of before.”
The sight of queues forming outside stores on Boxing Day used to be a festive staple, but this year the Centre
for Retail Research predicts online sales will jump by 10% for the 2019 sales period. More than half of all sales online are expected to be done on mobile phones.
The forecast comes as many retailers choose to keep their doors closed today. DIY retailer Homebase was the latest to announce it would do so on Boxing Day – joining John Lewis, Waitrose and Marks & Spencer, who will only keep open selected stores.
Research group Springboard has estimated that footfall in-store would fall 4.2% over the crucial December period. And it is predicting footfall will peak tomorrow and Saturday, rather than today.
Retail expert Clare Bailey said: “Generally, people are fatigued by sales, which happen all year round. Consumers no longer trust prices any more, suspicious of retailers ramping up their prices in the runup to Christmas and then dropping them again after. People have gotten used to buying on discount. If they know they need to replace something, they just wait and pay less, eroding the profits. That’s the problem retailers have created for themselves.”
Few retailers now wait until Boxing Day to slash their prices, and Mrs Bailey pointed to Next as being one of the few which stood out for holding on until December 26. Debenhams broke out its price reductions on Monday, and Deloitte put average retail discounts at 45.5% in the last days before Christmas. “Generally, the picture out there so far this Christmas is footfall is down, discounting is up and online sales are down,” Mrs Bailey said.
“The last four months have definitely seen falling sales. There has been suppressed spending because people aren’t clear about what Brexit means in their lives.”
The number of people going into shops in Britain on Christmas Eve fell by 9.4% compared to Christmas Eve 2018, according to figures out yesterday (25/12) from Ipsos Retail Performance.
Books and stationery stores were the only sector to experience yearon-year growth, with footfall up by 6.9%, according to the company’s Retail Traffic Index (RTI).
It comes as trips to non-food stores during the last full week before Christmas increased by 13.7% on the previous week, but fell by 14.2% when compared to 2018.
So-called “super Saturday” – the last Saturday before Christmas Day – also saw footfall drop by 6.2% on 2018.