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Will It Be a Gold Rush? Predictions for Retail’s ‘Golden Quarter’

  • 12th October 2020
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This week’s blog is a guest post by independent retail analyst, Nelson Blackley.

Every autumn, retail commentators like to predict what the final three months of the calendar year might bring to the UK retail sector. However, in the past few years, this has not always been as ‘golden’ as many had anticipated: most recently, in 2019, the combination of weak consumer confidence and the political uncertainty of two ‘hard Brexit’ deadlines, followed by a December General Election, resulted in extremely lacklustre sales over the peak Christmas trading period.

This year, however, the unprecedented social and economic impact of COVID-19 and the changes in consumer behaviour the pandemic has either encouraged or that legislation has enforced, makes any judgement about what might happen to UK retail during the ‘Golden Quarter’ almost impossible to predict – and that’s even assuming that all ‘non-essential’ retailers are allowed to continue trading over this period.

So, given what we’ve already experienced, what predictions can we make for this final quarter?

  1. The huge shift to online shopping seen during lockdown this spring for obvious healthcare and convenience reasons will clearly dominate the Christmas shopping experience. This move to a more ‘online Christmas’ started a few years ago, together with the impact of the ‘Black Friday’ online shopping festival in reshaping the pre-Christmas shopping calendar. However, we’ll probably have to get through the much-delayed Amazon ‘Prime Day’ (this week!) and then the huge ‘Black Friday’ four-day weekend at the end of November before the extent of this year’s Christmas online gift spending levels become clearer. Yet in such uncertain times for shoppers’ personal finances and their employment security, it’s very possible that many will choose not to plan too far ahead, but delay Christmas spending until the last moment, meaning that we could see sales rise from the second half of December. 

  2. I also expect far less extravagant Christmas TV commercials, whether from John Lewis, M&S, Sainsburys, Tesco, Morrisons or Asda. They are all likely to be much simpler and pivot to addressing COVID-19 issues (for example, thanking NHS and other frontline key workers) together with a much greater focus on the home, the family and keeping safe than usual.

  3. There will also be a significant reduction in many ‘peripheral’ Christmas gift sectors. Thousands of office Christmas parties and other Christmas work and wider family celebrations – or even young children’s annual visits to see Father Christmas – won’t be able to take place this year. This will mean a huge adverse impact on all those involved, and for any associated Christmas presents purchased. For example, after very strong ‘cult’ growth over the past decade, sales of novelty Christmas jumpers are likely to completely dive this year!

  4. However, there may well be a surge in sending Christmas cards. Although over the past decade sales have declined, as people met or exchanged greetings in other ways, I think in these socially distanced times, many may revert to a more traditional (and COVID-friendly) method of ‘seasons greetings’ communication, which also reflects the increased time now spent at home by many people. Digital card companies have already seen huge increases in demand and I think this will inevitably accelerate between now and Christmas.

  5. Finally, I expect that local and independent retailers will benefit from the continued move away from city centre shopping and national retail brands. So, suburban-based local butchers, greengrocers, fishmongers, florists, bakers and delicatessens will hopefully all profit from more consumers working from home throughout the pre-Christmas period and the continued aversion of many to travelling by public transport into crowded city centres.

 

Whatever happens over the coming three months, this ‘Golden Quarter’ for UK retail is going to be like none that we’ve experienced before. What are your thoughts? Get in touch with us here.

 

Nelson has over 25 years’ experience working for major retailers and, until August 2020, was Retail Research Associate at Nottingham Business School. He regularly posts about UK retail on his ‘Retail News and Views’ blog.

  • 12th October 2020
Guest Author

Written by Guest Author

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