If the retailers on the High Street were writing to Santa, it would probably read something like this: “Please Santa, can we have a very busy Christmas trading period with lots of people visiting our shops and spending plenty of money!”.
Unfortunately, this may be a wish which even Santa cannot grant. In the current climate of political and economic uncertainty, the majority of retailers not only ‘hope’ for a busy Christmas trading period, but they absolutely need one. This Christmas trading period can, for some, be the difference between survival and closure.
The economic forecasts for growth for 2019 in Northern Ireland were circa 1%, with the outlook for 2020 at a similar level. Although unemployment is at an all-time low, it is expected to rise in early 2020. The current local political stalemate coupled with Brexit still ‘not done’, combine to make the outlook for the current Christmas trading period not hopeful.
Traditionally, the Christmas sales started on Boxing Day, and people paid off their debts in January/February. However, with the introduction of ‘Black Friday’, which has now turned into ‘Black Friday week’, the sales start in November. The majority of consumers have only a limited pot of funds to spend at Christmas, so if the purchases are made in November, there will be little left for December.
The last few years have seen a shift in the High Street with the closure of many local retailers and a number of the bigger retailers entering an insolvency process or being removed from the High Street permanently. Again, the move from bricks and mortar to online shopping does not help the many retailers who depend on Christmas trading to secure funding for survival in the quiet early months of the following year.
Consumer debt has also steadily increased in the last number of years with some recent figures showing that the levels of consumer debt are now reaching the peaks of 2007, and most of us can remember what happened then!
Over ten years after the financial crisis and after years of austerity, the positive news regarding wage increases and inflation below the 2% target do not appear to have pushed the economy into material levels of growth. These factors, combined with the recent election will make some interesting reading when the Christmas trading results are released early in the new year.
The harsh reality is that despite the High Street wish for busy footfall, it will probably be delivery drivers for the online retailers, along with Santa’s elves, who are the busiest people this Christmas!