Tuesday 12 December 2017

No matter how tight the belt, Christmas is splash-out time

Model Rosie Huntington-Whiteley in the M&S ad
Model Rosie Huntington-Whiteley in the M&S ad
Shoppers at the Bath Christmas Market on opening night on November 28
Characters from the John Lewis campaign

Gabi Thesing

Britons do a larger proportion of their annual spending in November and December than Americans, so those months are even more crucial for retailers such as Marks & Spencer and Next than for the likes of Saks and Macy's. It's likely the same holds true for Ireland.

Christmas in the UK is celebrated "more enthusiastically than anywhere else", M&S boss Marc Bolland said recently.

Five years of economic hardship have accentuated the UK's Christmas spending peak, encouraging shoppers to save for their big end-of-year celebrations, according to Ian Geddes, UK head of retail at consultants Deloitte.

"If households haven't got the money, they'll tighten the belt all year," Mr Geddes said. "The one time they will make a big splash is Christmas."

UK retail sales in November 2012 were 15pc above the average for the first 10 months and 37pc above the average in December, government statistics show.

The holiday season is also the busiest time for UK drinking establishments. As Britons spend the long nights revelling with friends, colleagues and families, sales at pubs and restaurants in December surge to about 20pc above the monthly average, according to researcher CGA Peach.

One in five customers at the Asda supermarket chain will start saving for Christmas in January, the grocer estimates.

Such attitudes have spurred stores to stake their claims ever earlier. Asda opened its reservation lines for Christmas deliveries on November 21, two weeks earlier than in 2012. By that time, M&S and John Lewis had already been running lavish ad campaigns promoting the season for almost three weeks.

"It starts so early that when Christmas Day finally arrives, I'm tired of it," said Claire Landon, a 37-year-old New Yorker living in London.

Americans tend to spread their spending more evenly through the year, due partly to retailers offering promotions to encourage spending on occasions such as Valentine's Day and Mother's Day. And then there's Thanksgiving, which Donnelly says is the primary reason for the transatlantic disparity. The holiday, always on the fourth Thursday in November, "acts as a firewall in terms of Christmas promotions and Christmas spending in the US," said Chris Donnelly, a Chicago native who has lived in the UK for two years and is global managing director of the retail practice at consultant Accenture.

While the US has a relatively short Christmas shopping season this year, with Thanksgiving falling on November 28, Britain's countdown to Christmas started earlier than ever. The holiday lights on London's Regent Street were switched on on November 9.

Festive bazaars modelled after Germany's holiday markets opened in mid-November in London, Birmingham, Manchester and Leeds, two weeks earlier than Berlin and Frankfurt.

So by the time the US holiday shopping season officially got under way with the barrage of Black Friday discounts on the day after Thanksgiving, UK retailers had already been wooing Christmas shoppers for weeks.

TV ad spending is up 7pc in November and December from the same period a year ago, led by retailers, according to media agency The 7 Stars.

John Lewis, the largest UK department-store chain, has earmarked more than £7m for a six-week campaign.

Marks & Spencer's holiday commercial, featuring model Rosie Huntington-Whiteley and Academy Award nominee Helena Bonham Carter, made its television debut on November 6, a day earlier than last year's campaign. The retailer is seeking to reverse nine straight quarters of declining sales

"Unlike the UK we don't have the other holidays in the second half of the year," said Bryan Roberts, an analyst at researcher Kantar Retail in London. "So Christmas is a full-on consumer orgy – with the predictable retail hangover early in the New Year." (Bloomberg)

Irish Independent

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