Low inflation makes for bargain Christmas shopping for consumers

Retailers are gearing up for one of the busiest shopping weeks of the year as low inflation has resulted in bargain deals for consumers.

December accounted for 12 per cent of UK retail spending in 2015. Picture: Ian Georgeson
December accounted for 12 per cent of UK retail spending in 2015. Picture: Ian Georgeson

The British Retail Consortium (BRC) said customers would benefit from cut price offers on electrical, beauty and clothing ranges, while spending was set to outstrip last year. But it warned that the coming year would be “challenging” for retailers.

In its “Festive FAQs” newsletter, it said that negative inflation, which was at -1.7 per cent in October, the 42nd consecutive month of deflation, would force retailers to slash prices even further in the last few days before Christmas.

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However, the BRC said that Christmas Day itself had become a key shopping day due to e-commerce, social media and rocketing ownership of smartphones and tablets with which to order goods.

David Lonsdale, director of the Scottish Retail Consortium, said: “The weeks leading up to Christmas are the most important trading period in the year for many retailers, with December accounting for 12 per cent of all retail spending in the UK last year.

“The next few days will be particularly busy with gift-related shopping, while the focus in the final days before Christmas Day itself will largely be on festive fare.

“Last year shoppers spent £42 billion in December in the run up to Christmas Day. With shop price inflation low and average pay growth still continuing to outstrip inflation, consumers are set to benefit from some great deals on items such as clothing, beauty products, electrical goods, home entertainment and seasonal fare.

“Our surveys show that online retail sales are growing annually by 11 per cent. Those retailers with a strong multichannel offer – meaning customers can shop in-store, at home and on the move – will be best placed to capitalise on this crucial shopping period for the industry.”

The organisation added that 2017 was likely to see a number of retail chains fall into the hands of administrators as cost pressures build in the supply chain and impact on companies’ bottom lines.