A study by market research company Verdict has forecast that Christmas 2010 will be the best Christmas since before the recession.
Verdict predicts that consumers will spend an extra £1.6bn this year compared to 2009 – despite the recession and the government’s austerity measures. This would be the highest increase in sales since the fourth quarter of 2007.
Clothing, food and grocery, and health and beauty products are set to see the largest increase, but it is the online channel that is set to benefit the most. Online sales are predicted to account over three quarters of the growth in spending.
There are, however, some important caveats to consider. Firstly, the Verdict figure includes VAT – which has increased from 15% to 17.5% since last year. Secondly, growth is being driven by inflation and, thirdly, the report predicts some sectors will actually shrink.
Maureen Hinton, lead retail analyst at Verdict, said: “Though online is such a major factor in sustaining growth, the fact so many more retailers are now online means that even this channel is becoming more crowded and competitive. This switch to online does mean those retailers without transactional websites are missing out at a crucial period for the sector.”