It seems that the pessimistic economic outlook for 2017 ultimately failed to impact on our festive grocery shopping, with supermarket sales rising faster than they have since June 2014 in the final quarter of last year. It looks like many of us left it pretty late to stock up on Christmas food and drink, however: in a survey of 30,000 households by Kantar Worldpanel, over half did their grocery shop on 23rd December, which emerged as 2016’s busiest shopping day.
The British Retail Consortium found that robust figures in the week before Christmas means that shop sales overall in the period leading up to the 25th December were up by 1% from 2015. The BRC suggested that this was helped by both Christmas Eve falling on a Saturday and 2015’s relatively weak festive period, and described last year’s festive period as a “strong finish to a roller-coaster year”.
Barclaycard also reported a 4% increase in spending in December, but warned that this was driven more by price increases than consumers’ growing confidence. The rising price of oil and the weakened state of sterling meant that petrol purchases went up by 10%, with spending on essentials growing whilst luxury purchases declined. “The shift in spend from discretionary items to essentials reflects a growing sense of caution”, states the report from Barclaycard, “as the arrival of 2017 brings a new wave of economic uncertainty following the Brexit vote”.
The shift away from luxury items is also reflected in clothing retailer Next’s announcement of disappointing sales and a subsequent cut in their profit forecast for the year to the end of January. After expecting growth after a poor performance in the fourth quarter of 2015, Next saw a slump in both full-price sales in the run-up to Christmas and end-of-season sales from Boxing Day onwards. Considered a bellwether of the UK high street, the figures from Next could suggest that 2017 will be a tough year for other big name retailers.