Recent figures from the Office of National Statistic suggest high street retail is booming this autumn, with retail sales up 7.4% year on year in October. With an increase of 1.9% over September, this October saw the highest rate of sales growth since April 2002. Contrary to many who predicted an economic slump after the Brexit vote, and while the UK remains in Europe, retail appears to be in a good place leading up to the most important sales periods of the year: Black Friday and the Christmas Peak.
More good news for retailers is the increasing amount spent in high street stores, with consumers spending 6.6% more in October 2016 compared with last year, and up 2.1% on September. Retailers will be hoping this upward trend continues, increasing consumer spending during the peak sales period. The average weekly spend in October was £7.7 billion, an increase of £500 million year on year, clearly showing consumer confidence in the UK economy has not diminished despite warnings. Furthermore average retail prices fell 0.7% in October year on year, demonstrating how high street competition is dampening the effect of the decreased value of Sterling. Some have intimated that spending may be spiralling out of control, creating the bubble which forced the previous recession. However the lessons learned from back then may be applied.
The ONS report has even more good news for department stores and consumer electronics brands. The report found that 43% of retail sales in October 2016 were in non-food stores, encompassing department stores and household goods. Sales volume for non-retail stores was up 2.8% year on year, highlighting the growing consumer confidence in buying household goods. These figures are perhaps inflated by the weak Sterling which has increased international spending in particular on luxury goods, making that Hermes bag a steal in comparison to the price back home in its native France.
Overall, the ONS report suggests shoppers are ready to spend this Christmas. Of course, brands should not take these figures for granted, as in a highly competitive marketplace it’s still vitally important for brands to make an impact in store and be seen. Millions have been spent by retailers on this season’s Christmas adverts; they are now reliant on the products and brands they range to entice and convert shoppers into customers.
In order to successfully achieve this, all brands should be considering their retail execution at this busy time, especially focusing on education, merchandising and promotion to ‘wow’ shoppers looking for the perfect Christmas gift for themselves or another.