Retailers express cautious optimism for Christmas 2024 amid changing consumer habits and economic pressures.
- M&S and Tesco leaders are confident about sales, noting increased consumer willingness to spend.
- Department stores like John Lewis and Fortnum & Mason see early shopping trends with positive sales growth.
- Budget-conscious shopping behaviour persists, with Black Friday deals and economic caution influencing sales.
- Fashion, beauty, and grocery sectors anticipate varied spending patterns, focusing on value and quality.
The upcoming Christmas season is marked by a blend of optimism and cautious consumer behaviour among major retailers. The easing of inflation has bolstered shopper confidence, prompting M&S CEO Stuart Machin to express high expectations for sales, echoing Tesco’s Ken Murphy, who anticipates a ‘good Christmas’ as customers indulge in treat purchases. This sentiment is mirrored in the department store sector, with Fortnum & Mason and John Lewis noting strong early sales, supported by VoucherCodes.co.uk’s forecast of a £88.3bn sales boost, partly due to inflation and a 1.4% rise in sales volume.
Despite the positive outlook, a sense of fragility remains in consumer confidence, as highlighted by The Works CEO Gavin Peck. Many shoppers are expected to delay their purchases or opt for late shopping, a behaviour influenced by lingering economic uncertainty and the recent Budget. This cautionary stance is shared by Asda’s Lord Rose, who reflects on the challenging year faced by the country and the impact of the government’s fiscal plans. Retailers remain hopeful that family gatherings will stimulate economic growth during the festive period.
In the fashion sector, M&S’s focus on stylish seasonal offerings is seeing an enthusiastic response from customers, who plan to spend more this year. Conversely, Asos reports continued volatility in the market, with some consumers opting for lower price points. Matalan is adapting by launching Christmas offers earlier, aiming to capture sales from cost-conscious consumers.
Beauty retailers Boots and Superdrug are gearing up for a busy Black Friday, as more consumers spread their Christmas shopping over months. Boots’ technical issues during high demand reflect the level of customer interest, while Superdrug leverages social media trends to predict strong sales of its own-brand gifts and popular electrical beauty tools.
The grocery industry predicts a healthy season, with Tesco and Sainsbury’s noting a shift towards premium products as consumers treat themselves. M&S is witnessing a stronger demand for pre-ordered Christmas items, indicating well-organised shopping patterns. Aldi, meanwhile, is appealing to those seeking luxury at competitive prices, highlighting consumer desire for extravagance without overspending.
Department stores are preparing for a successful Christmas quarter, with John Lewis and Fortnum & Mason seeing a rise in early shopping behaviours. John Lewis’s sales have increased due to strategic investments in their Christmas offerings, while Fortnum & Mason expects a rise in experiential gifts. This trend towards experiences, amid economic challenges, is attributed to consumers seeking memorable moments over material items.
Homeware sales are soaring as shoppers prepare their homes well before Christmas, with John Lewis and Very reporting significant increases in decoration sales. The Cotswold Company highlights a trend of considered purchases, driven by thoughtful consumer planning and digital insights from social media platforms.
The gifting market reveals an emphasis on budget-friendly options, with Card Factory and The Works expanding their affordable ranges. The popularity of social media platforms in influencing book sales is notable, as seen with trends like BookTok driving demand for books as gifts.
Toy retailers are experiencing early sales spikes, attributed to cost-conscious early shopping by parents. The Entertainer and Hamleys report strong demand for varied price point toys, including film-related merchandise and ‘kidult’ toys. Meanwhile, retro and AI-driven electrical products are expected to dominate in the tech sphere, with Currys and AO.com anticipating high sales during Black Friday.
Retailers are cautiously optimistic for Christmas 2024, balancing economic challenges with opportunities in consumer spending trends.
