On the back of the Christmas trading period, retailers will be hoping for a growth in revenues and profits. Early indications suggest that this isn’t the case, and retailers should be gearing themselves up for disappointing results.
A volatile year in retail
The retail sector experienced a tough 2017 as the market tried to get a grip on the changing ways consumers now shop. As well as this, they are facing increasing competition from online retailers, as well as a lack of consumer confidence due to rising inflation and stagnant wages.
With online retailers now commonplace, consumers are choosing to spend their money from the comfort of their homes instead of going out to shop on the high-street. This has an impact on retailers, as a rise in online shopping is unlikely to make up the full shortfall lost from physical sales.
Retail intelligence provider Springboard said that footfall in shops was down 4.5% at the end of retailing on Boxing Day compared to 2016.
Boxing Day sales fail to increase footfall
Boxing Day sales were heavily advertised up and down the country, with millions of people turning out to grab last-minute bargains. Boxing Day sales have struggled in recent years, due to online discount phenomena like Black Friday as well as retailers including John Lewis and Marks & Spencer launching their sales online on Christmas Eve.
The days leading up to Christmas saw fewer people visiting stores to buy gifts, and this continued into Boxing Day. Retail analysts expect consumers to restrict their spending in the new year, as inflation will have an impact on spending power.
A lacklustre performance for retail this Christmas
Due to the upsurge in online shopping, and online sales events, physical sales for retailers are increasingly being hit hard. Retailers are continually looking at ways to evolve and stay relevant, and it appears that a lot of this will be an increased offering online.
The Christmas period, and in particular Boxing Day, is typically seen as one of the most successful times of the year for retailers, but the growing demand for online sales and appetite for new consumer habits means that retailers have an uphill struggle on their hands.
The high street is still somewhere consumers visit for convenience, or to grab a bargain, and this will continue, but retailers are quickly adapting their business models to include more of an online presence for consumers.
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