Not wanting to be the bearer of bad news, but being a great believer in ‘forewarned is forearmed’, sales forecasts in the UK Christmas season have been downgraded for the first time in 5 years. And why? Basically, the rise in interest rates, a period of high inflation coupled with wage growth still not catching up. People in the UK are finally drawing their purse strings in a little.
But it’s not a catastrophic prediction with VISA speculating only a 0.1% drop in consumer spending. While this decline should be set in context of a very surprising bumper selling year in 2016, there are undoubtedly challenges for the seller. It’s not all doom and gloom however, if you are selling online – which more and more luxury high ticket items are – it is predicted that there will be a rise in sales yet again of up to 4%. E-commerce sales have risen year on year since 2012, a rise attributed to websites being smartphone optimised – so people can shop anywhere anytime.
In contrast to online spending, face-to-face spending is expected to drop by 2.1% over the December period, the sharpest dip in five years. Despite the expectation of healthy e-commerce growth, it’s worth noting that even these promising figures represent a sharp contraction in the rapid rate of online spending growth shown last year, when it hit 8.9% during the Christmas trading season.