The Barclays Christmas Survey 2016 has revealed that retailers are optimistic that they will achieve a positive result in their biggest sales period, with most anticipating increased revenues on Black Friday and across the wider Christmas season.
A majority of retailers are more confident about Christmas trading compared with 2015 (60%), with just over half expecting an increase in revenue on Black Friday (51%) and through the entire season (53%).
The positive findings are a timely boost to the industry, Barclays suggests. Despite speculation that the EU referendum vote might pose challenges for the crucial end of year period, 63% of retailers predicted that Brexit will have no impact on Christmas spending this year.
However, fewer retailers will take part in Black Friday discounting this year. 24% of those surveyed said they did not hold a promotion last year, increasing to 27% stating that they would not participate this time around. This suggests that parts of the industry may be starting to resist what some see as an unwelcome discounting event in the run up to the all-important Christmas trading period.
Looking beyond the headline figures, retailers identified some interesting reasons for their optimism around Christmas sales. When asked what factors they expect to have a positive impact on consumer spending, 42% cited more shoppers staying in the UK this Christmas as a potential boost to sales, perhaps in part due to the current value of sterling. Just under half of those surveyed (48%) also expect the weaker pound to boost tourist or overseas spending, providing a further sales opportunity for UK retailers.
Online sales have grown at pace throughout 2016, and retailers expect this trend to continue through the Christmas season, with three quarters (77%) predicting that mobile sales will be the channel with the biggest growth.
Aside from attracting customers to their stores or websites, retailers increasingly have to ensure that they can fulfil orders even at short notice. The Barclays survey revealed some encouraging findings in this area too, with just one in ten retailers (10%) worried that their digital infrastructure may not cope adequately. Efficient logistics are also essential to cope with increased demand, so it is reassuring to find that 80% of retailers selected logistics as one of the top three areas of improvement they are focusing on this year.
Barclays head of retail and wholesale Ian Gilmartin commented: “It’s very heartening to find that retailers are optimistic about their prospects heading into the Christmas season. New challenges have emerged this year, with currency moves and general uncertainty providing plenty for retailers to think about, so to discover that the industry expects a positive result in this important period is great news.
“I’m particularly pleased that retailers are seeking to take advantage of the export opportunity, by targeting both tourists and overseas sales. Getting the balance right on Black Friday is crucial too, so the improvements in digital infrastructure and renewed focus on logistics is also encouraging, and will hopefully ensure that retailers can meet the heightened demand from customers during the discounting period and right up to December 25.”