UK Christmas season not so festive as spend will lag inflation says new study
With UK inflation running at around 2%, a study predicting just a 0.8% increase in Christmas spending this year is bad news for retailers. And it could be worse if a no-deal Brexit happens as the prediction would then be scaled back to 0.2%.
That’s according to the Shopping for Christmas 2019 report produced by the Centre for Retail Research for vouchercodes.co.uk. They said Brexit worries are hitting UK consumers hard and it means they won’t be splashing out this Christmas. On the upside, we have to assume that this would be likely to boost the discount/value sector, as well as resale and craft businesses, although that's no comfort for struggling fashion retailers.
The researchers looked at the six weeks up to the end of December and came up with a figure of £80.27 billion in total spend, up from £79.72 billion last year.
They said: "Lower growth in 2019, a fall in consumer confidence before Brexit and lower expectations about earnings in November 2019 to December 2020 will probably cause shoppers to spend less. If there is no Brexit deal, then Christmas spending is likely to be adversely affected. If lorries are stranded at ports, for example, economic life suffers immediately.”
2018’s Christmas season had seen a weak rise that also undershot the inflation figure, but at 1.2%, it was much better than is being forecast for 2019’s not-so-festive season. 2017 had seen a 1.4% rise.
Assuming the prediction comes true for this year, that would mean at least three years of rises that were behind the inflation figure, adding up to a noticeable real-terms fall overall.
Interestingly though, the research also showed that it’s not only the UK where consumer confidence is absent with Belgium, France, Germany, Italy, the Netherlands and Spain also seeing consumer confidence at 10-year lows.
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