BRC predicts Christmas boom and New Year slump

Retailers can expect strong Christmas sales despite tough trading conditions but will see a slump in the New Year, warns the British Retail Consortium. It predicts that sales of Christmas-related goods will top £12bn this year.

The BRC also says that much of the growth over the festive period will be driven by discounting and new store openings. It predicts that growth over the period will be 5% but adds that this drops to 3% when new stores are excluded.

The data, supplied by the BRC and Nielsen, reveals that consumers will spend an average of £435 on Christmas gifts, 12% more than last year, with clothes, books, and films among the big sellers.

Households will spend approximately £169 on Christmas food and drink, up 4% on the previous year, while the estimated sales of all Christmas-related groceries and related festive goods will hit £1.07bn, a 4% increase on 2006.

Kevin Hawkins, director general of BRC, says: “The retail sector has experienced challenging conditions this year and, with even tougher times ahead, these figures will be encouraging for many retailers.

“However, with the recent slump in consumer confidence and falling spending power, growth this year is likely to be driven by discounting. If retailers do see a boom this Christmas, it will be followed by a slump in spending, as consumers really start to feel the pinch and tighter their belts.”

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