Forecast for the Christmas 2024 Trading Period

With the return to low inflation, wage inflation that has been exceeding price inflation for a number of months and low unemployment it was hoped that the Christmas trading period this year would be a more vibrant affair than last year when consumers were cash strapped due to high inflation and interest rates.

However, in recent months in anticipation of the Budget and then post Budget, both consumer confidence and retail sales have weakened; consumer confidence as measured by GFK reached -21 in October versus -13 in August and retail sales growth in October as measured by the BRC was modest at just +0.3% versus +1.7% in September.  Additionally, the savings ratio (the proportion of household income being put away in savings) is almost the highest it’s been since the pandemic at 10%, demonstrating the cautiousness of consumers and their desire to save rather than spend.

Beauclair’s data offers unique intelligence on consumer spending in towns and cities, but also household spending in-store vs online. Over the 2024 Christmas trading period (6 weeks from 18^th November 2024 to 29^th December 2024) total UK spending is forecast to increase only marginally by +1.8% overall from the same period in 2023 with increases from 2023 of just +0.5% in store and +4% online. Beauclair identified that over the same six week trading period in 2023 spending rose by +0.9% in-store and +3.2% online. 

The +1.8% annual increase in spending over the six week Christmas trading period equates to an additional £1.5 billion of spending, £0.3 billion in-store and £1.2 billion online (based on Voucher Codes estimate of total UK spending).

*Source: Beauclair

Source: Voucher Codes “Shopping for Christmas 2024” report

The increase in spending during the 2024 Christmas Trading period is not forecast to be spread evenly across the UK.  Voucher Codes is forecasting that the largest proportion of the increase in spending will be generated by London and the South East (18% and 15% of the total increase), with a further 10% occurring in both the East of England the North West.

Black Friday

Black Friday is an established and key point in the annual retail trading calendar, and for consumers the week of Black Friday marks the start of the Christmas trading period.  Beauclair data on spending identified that in 2023 spending rose by +11% during the week of Black Friday from the week before compared with a week on week increases in the previous week of just +2% and a drop in spending of -5% in the week before that.

Consumers respond positively to price reductions offered during the Black Friday period, and many take the opportunity to purchase Christmas gifts at a lower price point.  Indeed, the drop in consumer confidence over the last few months this year is likely to lead to consumers becoming more price conscious, which in turn may drive them towards greater purchasing over Black Friday in order to secure gifts whilst discounts are available.  Furthermore, Black Friday this year (on 29^th November 2024) is a week later than in 2023 (24^th November 2023), which means that it falls on payday for many people.  This may provide shoppers with greater available budget to spend over the Black Friday week and on the day itself.

These factors suggest that spending will increase on Black Friday from 2023, both over the week as a whole (for those who are able to make purchases ahead of payday) and on Black Friday itself.  Spending is forecast to rise by a total of +2.6% from 2023 over the week as a whole and by +3% on Black Friday.

The increase in spend will be spread across both stores and online; on Black Friday spending in stores is forecast to increase from Black Friday 2023 by +2.5% and by +3.8% online.

*Source: Beauclair

The trend in spending throughout the Christmas trading period is influenced by Black Friday which creates a “dumb bell” effect, with uplifts in spending around Black Friday followed by smaller increases in the subsequent weeks until the week before Christmas when spending increases significantly.

In 2023, during the week of Black Friday (wb 20^th November 2023) rose by +11% from the week before, and by +6% in the week following (wb 27^th November 2023) – led by Cyber Monday.  Spending then flattened during the two subsequent weeks (-5% and +2% week on week), before increasing again during the week preceding Christmas (wb 18^th December 2023) by +18% . 

Likewise this year, a similar pattern is forecast, with spending +15% higher during Black Friday week (wb 25^th November) than in the week before. In the week following Black Friday (wb 2^nd December) – led by Cyber Monday – spending is forecast to rise by a further +8% week on week, before flattening out in the following week with an uplift of just +2%.

*Source: Beauclair

Pre Christmas Week – Peak shopping day

The week leading up to Christmas Day is absolutely key to the success of the Christmas trading period; Beauclair identified that in 2023 spending on Friday 22^nd December was +39% higher than the previous Friday and even on Saturday 23^rd December spending was 16% higher than the same day in the week before.

This year, Christmas Day is on Wednesday, and therefore it is expected that the peak shopping day will be Saturday 21^st December 2024.  Being four days ahead of Christmas Day,  this enables shoppers to make trips to purchase gifts and still have enough leeway to be able to travel to their Christmas destination.  And if they opt for online purchasing on Saturday 21^st December, there will be sufficient time for gifts to arrive ahead of Christmas Day.

Therefore, on Saturday 21^st December it is expected that total spending will be +29% higher than the previous Saturday (14^th December 2024) and +22% higher than on the same day in 2023 (23^rd December 2023).  Online spending is forecast to increase annually by +30%, more than in-store (+20%) which is due to the day falling earlier this year, which will enable online purchases to be delivered ahead of Christmas Day.

Source: Beauclair

Post Christmas Days

In the past Boxing Day was the peak post Christmas shopping day, but over the last decade or so the peak shopping day has steadily shifted to 27th December. There are two key drivers of this; firstly the growth of blended families over the last few decades has meant that for many people Boxing Day is a key opportunity to have a second Christmas with the other half of their family; and, secondly, the plethora of online shopping platforms means that sale bargains – in the past only available in-store from Boxing Day onwards – can be secured from the comfort of the sofa even on Christmas Day.

For many of those consumers who do venture out on Boxing Day, it is now much more of a leisure based trip, and consequently the largest uplift in footfall occurs post lunchtime and into the afternoon as consumers browse stores and visit hospitality venues. While the demand for hospitality carries over to 27th December, trips for shopping to retail stores becomes more significant as consumers look to capture post Christmas discounts. In addition, the fact that 27th December is a normal trading day, and therefore not subject to bank holiday opening hours, makes it likely that spending will be higher on 27th December than on Boxing Day.  This has been exacerbated over the last few years as many retailers have taken the decision to keep their stores closed on Boxing Day, which means the first opportunity for consumers to shop the entire breadth of the high street post Christmas is 27^th December.

Beauclair’s spending data supports this, identifying that in 2022 and 2023 spending on 27^th December was +43% higher than on 26^th December, with an even greater increase in-store (+74% in 2022 and +72% in 2023).  Online spending also increased from Boxing Day, however, inevitably this uplift has been lower as a proportion of post Christmas shopping online will have taken place on Boxing Day and Christmas Day itself.

This year, we expect this trend to continue particularly as 27^th December falls on a Friday, which typically is a more significant shopping day than mid week days.

Whilst Boxing Day has become less significant as trading day than 27^th December, spending rose annually on 26^th December 2023 by +7.5%.  On 27^th December 2023 spending was also +7.6% higher than on 27^th September 2022.  The majority of increases on both days were driven by a rise in online spending (+9% and +15.3%), whilst in-store spending in 2023 rose only by +1.9% on Boxing Day and by just +0.5% on 27^th December.

This trend is forecast to continue this year, with total spending on 26^th and 27^th  December expected to be +6.1% and +4.6% higher than on Boxing Day and 27th December 2023.  In-store spending is forecast to increase from 2023 by less than online on both days – by +1.5% and +3% in-store versus +11% and +7% online.  

*Source: Beauclair

Overall, this Christmas period (six week period from 18^th November) is expected to be one of caution for consumers in terms of their spending.  Spending is forecast to increase modestly from 2023 over the six weeks as a whole, particularly in-store whilst many shoppers are likely to seek the best price possible online.  With continuing uncertainty the focus for many consumers will be to enjoy a festive period whilst avoiding depleting their savings to do so.

About Beauclair

Evidence of online and in-store spending is provided by Beauclair which specialises in delivering big data for the benefit of local communities, creating positive social impact. Spending data is obtained from debit card transactions from UK bank accounts – evidence demonstrates that two thirds of all retail spend occurs on debit cards.