Retailers “more confident” about Christmas

Confidence is high in the retail sector as the festive season approaches, according to Barclays annual Christmas Survey, with a record 77 percent of UK retailers stating that they are “more confident” compared to last year.

The survey also reveals that 79 percent of retailers are expecting revenue to increase during the Christmas period, with 14 percent predicting their revenue will rise by more than 10 percent, and the majority of retailers, 56 percent, expecting mobile to be the channel experience the biggest sales growth.

The buoyant festive period is expected to start with Black Friday, which Barclays states has a “growing significance,” with 77 percent of retailers revealing that they plan to hold a Black Friday promotion this year, up from 73 percent last year, and 69 percent expect sales to rise compared to Black Friday 2014. Only 4 percent surveyed anticipated a fall in profits from last year.

Ian Gilmartin, head of retail and wholesale at Barclays, said: “When Black Friday first came to the UK, the industry speculated about whether it was just a fad or would really take hold. This research shows that it appears to be here to stay, as for the first time, more than three-quarters of retailers plan to hold a promotion.

“As long as retailers focus on selected lines and manage the level of discounting appropriately, this increased participation can contribute to a successful Christmas season.”

77 percent of British retailers more confident about Christmas trading than last year

Along with the growth of mobile sales, which retailers expect to grow by 52 percent compared to last year, click and collect is also expected to continue to rise in popularity, with retailers expecting an estimated 25 percent increase in orders compared to 2014.

Looking at specific sectors, retailers identified electricals as the category most likely to see the best growth this Christmas, followed by beauty and health, and luxury products, reflecting increasing confidence and spending power from some consumers.

Gilmartin added: “It’s our 3rd year compiling the Barclays Christmas Survey and the results are more positive than ever. The overwhelming confidence around prospects for the whole Christmas season is great to see.”

Despite the increased confidence, when asked to identify the biggest threat to success this Christmas season, 41 percent of retailers selected logistics stress, almost double the number who picked IT failure, which was the next largest at 23 percent.

Gilmartin commented: “Perhaps ironically, I’m pleased that we found retailers are conscious of the risk posed by logistics stress. I’ve seen over recent months the huge efforts the industry is making to ensure that we avoid some of the logistics challenges encountered last year, particularly around Black Friday.

“Although it will be a tough ask to meet the higher demand this year, I’m confident that the increased planning and resources retailers are employing will lead to a successful outcome, both on Black Friday and right through December.”

Image: Burberry Christmas campaign 2015