Great expectations this Christmas

Ahead of the Autumn Budget last month and bracing themselves for announcements facing the industry, retailers were hoping for a busy Christmas period to boost profits.

And whilst retail sales are set to uplift versus previous years, sales volume is forecast to decrease by 0.3% for the first time since 2023 as consumers remain cautious over festive spending.

As retailer Peter McBride told NR, Christmas is a difficult time for convenience retailers.

“We have high sales for the weeks leading into Christmas but sales suffer after,” he said.

“Higher wage costs, reductions and wastage, and general operational difficulties make Christmas hard work. Coming out of Christmas is as important now as going into it. Fresh deliveries are difficult in the period immediately after Christmas, but there are big wins to be had with good planning, availability and staffing.”

Retail sales grew strongly in the three months to October, according to the latest figures from the ONS. However, in October alone monthly sales fell back for the first time since May.

“Supermarkets, clothing stores and online retailers all saw slower sales, with feedback from some retailers that consumers were waiting for November’s Black Friday deals,” said ONS Chief Economist, Grant Fitzner.

Meanwhile, the British Retail Consortium said much of the growth in October was from a strong performance from smaller retailers.

“BRC members hope that Black Friday and the run up to Christmas will provide an uplift to sales, particularly when the Budget falls during peak trading season which has knocked consumer confidence,” said Dr Kris Hamer, Director of Insight at the BRC.

“With retailers still reeling from the £7bn of additional tax, they are hopeful for a budget that ensures no store pays more in business rates so they can invest more in their stores and warehouses which bring jobs and growth for the UK economy.”

Peter McBride said he was remaining optimistic about this Christmas.

“We are looking forward to the Christmas season with optimism having experienced strong sales growth so far in 2025,” he said.

“Every year we get a significant uplift in sales in the week leading up to Christmas Day, more especially in the two or three days preceding the ‘big’ day.”

With the 12 Deals of Christmas promotional campaign run by SPAR well underway across his stores, Peter said these deals are very important for both him and his customers.

“This is the main mechanic we have been running for a few years now, and our customers look out for the new deals every week,” he said.

“It’s a very popular campaign and offers market-leading deals that really sets us apart from the competition. We are also planning some carol singing events in some of our stores, and tasting of some Christmas fayre to help everyone get into the festive spirit.”

Describing Christmas as a balancing act, Peter added that despite the balance being the same every year, it doesn’t seem to get any easier.

“It’s about having enough of what everyone wants, but not having too much that will incur huge waste, primarily of fresh product lines,” he said.

“We really need full availability into Christmas Eve, this is what our customers expect and we need to deliver on that.

“Christmas 2024 was a great trading period for us and every year we always manage to beat the previous year. This year can be no different. We must achieve like-for-like sales growth of a minimum of 5% to ensure we are at least ahead of food inflation, above that is real growth.”