British retailers are bracing for a significant Boxing Day boost, with shoppers expected to spend a hefty £3.8 billion as the traditional post-Christmas sales period sees a renewed surge in popularity. This represents a 2% increase compared to last year's takings, according to analysis by GlobalData for Vouchercodes.co.uk.
Online Leads the Charge as High Streets Enjoy a Boost
While the dash to physical shops has eased in recent years, the appetite for a Boxing Day bargain remains a potent force in the UK's retail calendar. This year, growth is being driven predominantly by online sellers, who are forecast to see sales rise by 3.4%. However, bricks-and-mortar stores are also set to benefit, with high streets and shopping centres predicted to record a 1.5% increase in sales, outpacing the current shop price inflation rate of 0.6%.
The resurgence comes after a more subdued Black Friday period, where retailers reported disappointing demand as savvy consumers held out for better deals. Kien Tan, a retail advisor at PwC, commented, "There are signs that Black Friday has peaked in the UK and there will still be people looking for bargains on Boxing Day. It's not necessarily a comeback but it's still there – a British institution."
Shoppers Cautious but Ready to Spend on Key Items
Tan noted that shoppers are entering the sales with more caution than a year ago, citing "a lot more uncertainty" causing people to hold back. Despite this, specific categories are expected to perform well. Online shopping is being driven not by fashion hunters, but by busy middle-aged consumers likely to spend on furniture and home gadgets. This is because it has now been five years since the pandemic-fuelled home improvement boom, meaning many items bought then are due for replacement.
Moji Oshisanya, Chief Commercial Officer of VoucherCodes.co.uk, highlighted a critical trend: inflation is distorting the true picture. "Over the wider six-week Christmas period... sales value is expected to grow by 3.2%, yet sales volume is forecast to fall by 0.3%," she explained. This means people are spending more money but likely taking home fewer items.
Footfall and Discounts Paint a Mixed Picture
The run-up to Christmas saw signs of hesitation, with mild weather hampering sales of winter clothing. This prompted major retailers like New Look, Boohoo, and Sports Direct to launch early discounts of up to 70% on Christmas Eve. Next, John Lewis, and Topshop also offered 50% off.
Footfall data from MRI showed a 4.5% drop on Tuesday 23rd December compared to the same day last year, though it recovered slightly on Christmas Eve, up 0.4%. MRI also reports that about 44% of consumers plan to visit high streets from Boxing Day onwards.
However, the high street faces challenges. Many large stores, including most John Lewis outlets, Aldi, Poundland, B&Q, Next, and large M&S stores, remain closed on Boxing Day. Furthermore, with 27 December falling on a Saturday this year, it is expected to rival Boxing Day itself as the busiest shopping day of the post-Christmas period.
