Retailers set for £85.2bn Christmas windfall
By Ben Sillitoe - 11:58AM - Fri 15th October 2010
The retail industry is set to see sales levels reach £85.2 billion this Christmas, according to Verdict Research.
Compared to the festive period in 2009, this represents an increase of 1.9 per cent, or an extra £1.6 billion in consumer spending.
Mixed fortunes are expected across the various sectors of the industry with strong sales predicted in clothing, grocery and health & beauty, but not so positive trading activity anticipated for the home & DIY category.
Verdict also indicates that the electricals sector will benefit from the provision of new products, although sales will be tempered by price depreciation.
Online sales are expected to rise 17.6 per cent to £8.1 billion, representing the largest share of growth of any sector.
Although the general outlook for Christmas 2010 appears bright, the expected sales figures include VAT which has increased from 15 per cent to 17.5 per cent since last year.
Other caveats noted by Verdict include the fact inflation is driving growth – particularly in clothing, food, and health & beauty – and some retail sectors are set to shrink.
Maureen Hinton, Lead Retail Analyst at Verdict, said: “Though online is such a major factor in sustaining growth, the fact so many more retailers are now online means that even this channel is becoming more crowded and competitive.
“Those retailers we trust, such as John Lewis, Marks & Spencer and Next, that provide a range of multichannel options for buying, delivery and exchange are the winners at Christmas, as well as specialists with unique ranges such as The White Company.
“However this switch to online does mean those retailers without transactional websites are missing out at a crucial period for the sector.”