Christmas trading in 2022
In our December newsletter, we looked at the trading performance over the pre-Christmas period and found that the rise in inflation had been masking the challenging trading conditions within the retail sector. Christmas and New Year have come and gone, and the results are in.
Unsurprisingly, a similar trend over the Christmas period emerged, with shoppers clearly prioritising value over ‘frivolous’ expenditure. Many retailers reported strong sales, with overall year-on-year sales growth at 6.9%. However, as was the case with November’s Black Friday sales, figures seemed to have been skewed by the high level of inflation. With the ongoing cost-of-living crisis, consumers continued to rein in their spending and sales volumes fell by 5.8% compared to December 2021. According to the Office of National Statistics (“the ONS”), this represents the worst-ever fall since records began in 1997.
That said, there were some ‘winners’ over the festive period. Primark recorded £3 billion worth of sales and value grocery retailers Lidl and Aldi also did very well, attributing approximately £63 million of their trade to have been won from traditional grocers, due to the increased importance of value for consumers.
Although traditional gifts, such as toys, beauty and electricals had a strong Christmas, grocery sales were higher than £12 billion over Christmas, the highest amount on record. Following the emergence of the Omicron variant the previous year, consumers appeared to be keen to splash out on the Christmas dinner this year. In addition, footfall in the shops increased, while online sales dropped from 25.9% in November to 25.4% in December.