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UK retail sales in December better than last year says forecast

Market intelligence group Mintel is forecasting UK sales growth of 4 per cent in December, bringing the potential of Christmas cheer for retailers. More than three quarters of the sales are expected to be made from physical stores.

Mintel predicts total retail sales of £47.7bn during the month, compared to £45.8bn last year. Non-food sales are expected to account for £23.5bn of the total, with food purchases worth £18.6bn.

Mintel expects online sales to account for £11bn, or 23.4 per cent of the total, with £4bn of online non-food sales are expected to be generated by physical stores. Stores are also forecast to generate £1.4bn of online food sales. Pure online retailers without physical stores are expected to account for £5.6bn of sales.

“We think that retailers can look forward to a reasonably good Christmas—not outstanding, but it won’t be bad either. While there are some reasons to be cautious, such as falling consumer confidence, there is no real sign of an underlying slowdown in retail sales growth. Retail sales have held up well this year and we expect the recent momentum is likely to be maintained, with retail sales growing at about 4% both in the final quarter of 2018 and in December itself,” says Mintel director of retail research Richard Perks.

“While there’s been much talk of how the High Street is being undermined by online retailing, it still only represents a relatively small part of overall retail sales, with most shopping still taking place in physical stores.”

Seasonal spending may get a boost from a reluctance to engage with Black Friday this year. According to Mintel, 66 per cent of Black Friday shoppers in 2017 felt that discounts weren’t as good as retailers claimed.

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