Retailers upbeat on Christmas season but fashion could still struggle - Barclays survey

There may be huge discounts on the UK high street at present but British stores are feeling surprisingly upbeat about the Christmas shopping season overall, a new survey shows.


Retailers may not quite be in a party mood but they're relatively upbeat about Christmas


The Barclays Christmas Confidence Survey on Friday showed that 71% of retailers are are feeling “more confident or as confident” for their Christmas trading prospects compared to last year, while 49% expect to achieve revenue growth.

OK, that still leaves a sizeable number fleeing less upbeat, but given the current doom and gloom surrounding UK retail, it’s fairly impressive.

But fashion retailers may be feeling downbeat. When asked just what retailers expect people to be buying more of this season, some 64% expect Beauty & Health gifts to see growth. As many as 60% say homewares will rise and ‘experience' gifts are set for a rise, according to 46%. But most expect clothing sales to be weak.

MARKETING BOOST

Barclays also said that many retailers have been ramping up their marketing spend to reach their target consumers with 34% spending more, despite rising cost pressures. And 43% think the increased marketing across the sector will be a big plus overall for Christmas trading.

Black Friday is a key part of the overall strategy with 73% taking part this year, although their individual approaches to the day are becoming more sophisticated.

Instead of resorting to panic discounting, half of those taking part are limiting their Black Friday deals to certain channels and 36% are maintaining careful limits on the amount of product they offer as they work hard to ensure that margins don’t take too much of a hit.

In fact, as many as 70% are planning markdowns carefully with margins in mind and are opting for a longer period of sustained-but-moderate discounts this year rather than an all-or-nothing race to cut prices for Black Friday.
Retailers also said that omnichannel will be more important this year with almost half (49%) of their sales this Christmas season expected to be a result of more than one channel with research done online and the purchase in-store (or vice-versa).

Barclays said that retailers expect around 30% of their sales to be completed online, which is double the rate in a regular month, and this means that many have upped their online investment this year.

But while Black Friday is key, Barclays also said that retailers still don’t like it. Ian Gilmartin, Head of Retail & Wholesale at Barclays Corporate Banking, said: “Most retailers don’t like Black Friday, with less than one in five believing that discounting generates increased sales. Consumers now expect heavy price cuts across the board in the middle of the retail industry’s most important season, so the evolving approach, with two-thirds of retailers telling us they are planning discounts more carefully this year, reveals that retailers are focused on finding ways to make Black Friday work for them.”

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