CONSUMER spending has been softer than expected and is only marginally up on the same period of 2013, but post Christmas sales spending is set to break records according to new reports published.
Seán Murphy, Retail Excellence Ireland Deputy CEO, said, “Christmas 2014 will trade marginally up on Christmas 2013. It would seem that while all the indicators pointed to a vibrant Christmas 2014, the fact is that seven years of frugality is a hard habit to break. The expectation was that the last few days before Christmas would be buoyant, unfortunately trading failed to ignite across Ireland.
“Price Drop – It is likely that the sales period will be one of the best on record. The Irish customer has never had it this good. Retailers are preparing to drop prices by upwards of 80% in a bid to convert stock to cash”.
The report said that customers have postponed a lot of spending into the sales period, especially for fashion and footwear.
Other findings indicated that luxury prestige brands will enjoy a bumper sales period predicated on competitive pricing and significant pent-up demand especially from international customers.
“Later in the month customers will surge to buy ‘big ticket’ flooring, furniture, kitchen, bathroom and paint at significantly discounted prices.
“The Government’s Home Renovation Incentive Scheme will act as a further ‘call to action for the home improvement market,” he concluded.
“Home for Christmas – Provincial Ireland enjoyed a reasonable increase in footfall and retail sales in recent days as a significant customer cohort exited the cities and returned home for the Christmas holidays. That said more was expected.
Margin Collapse – There has been an unheralded level of retailer promotional activity in the run up to Christmas 2014.
Whilst sales might have grown slightly, margin is most definitely down.
Giving Experiences – Consumer behaviours have radically changed with many new spending categories forming. There is a greater eagerness on the part of customers to buy experiences rather than a box on a shelf. A case in point is the 70,000 tickets sold for the One Direction Dublin concerts.
In the Bag – There has been a notable decrease in the number of items purchased by consumers this Christmas. Customers are buying less, but buying better. The days of customers walking down our primary streets laden down with bags are over.
Self-gifting – Many retailers are reporting some enhanced self-gifting activity. It would seem that discretionary spending on ourselves is increasing slightly – because we are worth it!
Christmas Day – Christmas Day will mark the commencement of online Sales. It is predicted to be a very busy trading day!
Home – This December retailers have noted a return by consumers to getting the house “set” for Christmas. We are becoming more enraptured in creating a sense of occasion around the Christmas holiday season.
Difference – It is clear that consumers today actively seek out difference. Thus retailers who have delivered an innovative product range in an innovative store setting are outperforming their competitor set.
Online Spike – Whilst off a relatively low base, online sales have grown exponentially this Christmas with many retailers struggling to meet demand. Some had to abandon “click and collect” services as they simply could not cope.
Frozen –The must have doll of 2014. Supply ran out and counterfeit toys have been rife. Some say the counterfeit toys market is now more lucrative than other illicit markets.
Tech – The insatiable demand for tech continued with the must have item this Christmas being the Apple iPhone6. If you got one, you are one of the lucky ones.
Crime – There has been a notable increase in violent robberies in stores nationwide. In January REI will establish a loss prevention group to profile this issue.”