With one in four consumers intending to spend more this festive season, PwC is predicting a total spend of £21 billion – a 12 percent year-on-year increase – but there are significant challenges facing high street retailers.
The PwC Pre-Christmas Survey which is sent to a representative sample of 2,004 adults across the UK, shows an upswing in the numbers planning to share the festive period with friends and family following the Covid disruption of 12-months ago. But according to PwC retail and hospitality businesses need to face-up to some unique challenges. Despite resilient consumer sentiment, and the combination of increased confidence, pent-up demand and lockdown-forced savings the positives are offset by a myriad of challenges including inflation on key items, staff shortages and supply chain concerns. The success of the festive season for businesses on the high street is dependent on the possibility of how future COVID-19 mitigation plans will impact the sector including the spectre of compulsory vaccine passports.
The fear of Christmas shortages will result in much earlier than normal shopping with implications for high street businesses. The PwC survey argues: “While the first half of December remains the most popular time for shopping, more than half of us will have completed our Christmas lists before the end of November. With concerns over stock levels, delivery times and further impacts of COVID-19, 21 percent of us are looking to shop earlier than usual, particularly younger age groups and Millennials. This intention to shop earlier could be driving interest in Black Friday. With a likely £9 billion spend, it’s a significant shopping event in the UK.”
Perhaps most concerning for the high street is the long-term trend for Christmas shopping getting much closer to that of Black Friday, which in the UK has predominantly been an online phenomenon in recent years.
Lisa Hooker, Leader of Industry for Consumer Markets, PwC UK stated: “It may not be back to a completely ‘normal’ Christmas this year, but consumers are determined to make it a good one. And they are ready to spend. With many already prepared to spend 20 percent more than last year, and buy more presents, there’s a unique opportunity for retailers this Golden Quarter.”