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Two weeks in retail - 2nd January 2013

Can it really all be over already?

We are already two days into 2013 and as the majority of the UK return to work the post-Christmas analysis has already begun in earnest.

Christmas 2012 certainly seems to have been another battle of wills between retailer and consumer with the latter again holding out for – and being rewarded with – last minute discounts. Retailers including Marks & Spencer and Sports Direct were cutting prices by Christmas Eve with discounts for some retailers of 90% whilst many retailers’ full scale post-Christmas sales launched online before Santa had even finished delivering his gifts.

Data provided by Sainsbury’s bank suggested shoppers would spend £55 million an hour on Christmas Eve – totalling £1.3 billion in all.

Footfall data pre-Christmas suggested shoppers were leaving it late. The Office of National Statistics said that the total value of sales for November was up 2.5% compared to the same period a year ago.

Meanwhile footfall fell 2.6% for the week ending December 16, according to the BRC-Springboard Footfall Monitor. The figures were down 4.3% in shopping centres and 2% in high streets although footfall was actually up 3.3% when compared week on week.

However figures later compiled by Springboard for the Financial Mail suggested that December shoppers numbers in total up to Christmas Eve were down 1.3%.

The BRC meanwhile said that Christmas trading was “not exceptional” and that retailers would continue to struggle in 2013.

“As always there was a last minute Christmas rush,” said new BRC Director General Helen Dickinson.

“It came later this year because hard-pressed customers remain cautious, wanted to hold out for bargains and there was a final full shopping weekend immediately before Christmas that the calendar didn’t provide last year,” she said.

The true picture will emerge over the next few days as Christmas trading statements from retailers are announced.

However experts were predicting a busy post-Christmas spend too with MoneySupermarket.com forecasting a £4.7 billion instore and online spree with 1.4 million shoppers expected to shop online on Christmas day and four million planning to spend £2.9 billion on Boxing Day.

It seems the experts were right—particularly online. Experian said that visits to websites peaked at 107 million on Christmas day – up by a massive 86% from last year. Experian, coupled with IMRG, suggested that visits to UK retail websites would reach 126 million on Boxing Day, up by 31% on 2011 and 17 million expected to spend around £472.5 billion.

John Lewis meanwhile announced that the first hour of its online Christmas sale – which began at 5pm on Christmas Eve – saw orders up by 70% on 2011. In its last week pre-Christmas the department store group saw sales of £157.8 million – up by 26.5% on the same week the previous year for the week ending Saturday 22 December.

The retailer was one of the first to announce its Christmas trading updates when it today revealed a 14.8% lift in sales for the five weeks to 29 December, up 13% on a like for like basis. Online sales rose 44.3% on last year and now account for a quarter of John Lewis’ business. The final week of Christmas saw sales increase 11.5% to £112.9 million for the week to December 23. Its first day of clearance saw £31.7 million of sales.

It seems the true picture of Christmas will yet again be a mix of fortunes for retailers – but the real winners are likely to be online yet again. A new survey of SME online retailers by the Royal Mail said that nearly two thirds – 64% - expected sales to improve this year and half saw growth last year.

Traditional retailers however have continued to suffer with a 6% year on year rise in administrations in the retail sector according to Deloitte with 194 retailers entering administration in 2012 including Peacocks, La Senza, Clinton Cards and Comet.

Retailers will certainly be hoping for more cheer in 2013.

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