Prospects for Christmas are okay, not great, and look gloomy for grocery superstores.

Prospects for Christmas are okay, not great, and look particularly gloomy for grocery superstores. There are problems around – there is still an income squeeze and there is the threat of rising interest rates - but we think any negative impact of those is more likely to be after the election. 


Prospects are worst for the food retailers. The underlying trend is towards buying online and from Aldi and Lidl and that is taking business from the superstores. Fewer shopping trips mean lower sales and, in particular, lower sales of non-foods and gift items. Add to that low food price inflation and, perhaps, some price skirmishing and the food retailers look set for their most challenging Christmas periods in recent years. M&S and Waitrose should be exceptions, but Aldi and Lidl look set to be among the big winners of this Christmas.


Of course online sales are going to be strong. Online tends to be stronger over Christmas anyway – if people are shopping for pleasure, for themselves, they are more likely to shop in-store. But Christmas present buying is functional, so online is ideal. When we asked people after last Christmas whether they would be spending more online next time round, a quarter said that they would.

But it’s not how you buy that matters, it’s who you buy from. The store-based retailers tend to see an increase in their share of spending over Christmas and for them the difference between buying online and buying in-store is academic. So those with a strong online offer are best placed for Christmas demand – and that, of course, means John Lewis again. 

Better information

We’ll see greater use of mobile devices as well, though here again we think that the important factor is not how you buy, but what you use the mobile device for. 

One of the key trends of Christmas 2013 was the extremes we saw in retailer performance – M&S down 2.5% like-for-like and Next up over 11%. We think that one of the main drivers for that was that shoppers could – and did - check out one retailer while browsing in another. So there was no longer any need to make do with second-best.

Loyalty, a thing of the past

That means that a retailer really is only as good as this season’s ranges. Extreme performances will be a feature of retailing going forward. That’s tough for those that fall short – as M&S did last year. But it also means that it will be much easier than in the past to turn around a poor performance because shoppers will be quicker to reward better ranges.

A more savvy shopper

Retailing is constantly changing – that’s what makes it so fascinating to follow. And it is changing faster now than any of us can remember. It’s not a matter of stores vs online – in fact we think that online has boosted the high street. The key is that we have a much better informed consumer, one that is also much more demanding and much less inclined to give second-best the benefit of the doubt.

Richard Perks, director at Mintel