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Brits to spend seven times their weekly grocery budget on festive food

Brits are likely to go Christmas bonkers on festive indulgences this year, spending an average of £166 per person on groceries for the period, more than seven times the average weekly spend on household food and drinks.

According to research from Give As You Live, London leads the charge, with an average spend of £199 per person. Bristol comes close to the top spot with £188 per person, just edging ahead of Southampton on £187 per person.

Aberdeen makes the top five position, with the average person spending £181 per person on festive food.

Nottingham and Norwich are more modest when it comes to spending on food, with both cities spending an average of £122 per person, the lowest spend of the cities surveyed.

The survey also revealed that men are likely to want a few more pigs in blankets than women, as they are expected to splash out an average of £177 per person on food during the festive season, above women’s £154 per person.

The research also revealed that Brits will change their usual shopping habits based on Christmas advertising influencing the way they shop, with 44% saying that adverts will help them decide where to buy Christmas goodies from.

Online recipes (37%), cooking TV programmes (29%), and videos on Facebook and YouTube (18%) are also top sources of inspiration when it comes to Christmas shopping.

Greg Hallett, managing director at Give as you Live, said: “Whether it’s cooking for the family on Christmas day, eating out with friends or hosting festive dinner parties, food at Christmas time brings people together.

“But it is also expensive, which is why it’s important to budget and plan during the festive season, such as with pre-paid grocery cards, online deals, and bulk buying. These can all help keep the costs down and ensure everyone can enjoy indulging without worrying about the cost too much.”

Black Friday + Cyber Monday 2018 = £7bn

The combined revenue to UK retail from Black Friday and Cyber Monday is predicted to have reached £7 billion, according to industry forecasts.

However, there have also been reports that the focus on online has been associated with a decrease in store footfall overs the sales weekend.

The British Retail Consortium (BRC) told The Guardian that Black Friday were expected to be up on 2017, which itself saw revenue rise 8% year on yeah.

“Black Friday and Cyber Monday have become a staple fixture of the calendar year and an important one for many retailers,” a BRC spokesman said. “While it is too early to say how retailers have fared on Black Friday itself, we expect the weeks surrounding Black Friday to show some growth on last year. Whether the day itself breaks records will depend on how consumers have responded to the promotions offered this year.”

Deals comparison website Finder.com said it expected punters to spend an estimated £7bn on Black Friday and Cyber Monday purchases, combined.

And a survey by F&C Investment Trust said Britons would be spending £7.7bn over the extended shopping weekend (on top of an eye watering £19.2 million on sales so far this year).

Meanwhile, market analyst Springboard said that Black Friday and the weekend that follows do very little to help the beleaguered High Street.

It anticipated that footfall would drop by -3.7% YOY compared to Black Friday 2017 and by -2.7% over the weekend as a whole.

This follows a decline in footfall on Black Friday 2017 of -3.6%, and -1.1% over weekend, revealing the UK’s appetite for this pre-Christmas spending spree may be wavering.

“Whatever happens on Black Friday, our data over the past few years has established that it brings Christmas spending forward,”| Diane Wehrle, Marketing & Insights Director at Springboard. “This creates a magnet of spending activity at the beginning the peak trading period which then suppresses spending until the final week before Christmas, when consumers take advantage of last minute deals that are likely to be introduced by retailers to drive sales in what is a highly challenging trading climate.”

Global m-commerce ‘to take over desktop shopping by 2023’

UK consumers are on an endless mission for convenience as mobile continues its ascent to dominance as the most popular shopping channel.

Growing at a rate of 16 percent annually in the UK, m-commerce is set to be worth £88.1bn by 2022, according to new data from Worldpay.

In its annual Global Payments Report, Worldpay found the total eCommerce market in the UK is set to grow by 40 percent between now and 2022 to £240bn (9 percent CAGR).

E-wallets in particular are favoured when purchasing via mobile, currently making up 23.2 percent of online payments in the UK.

This is set for rapid growth driven by increased smartphone ownership, faster mobile networks and consumers continually looking for a more seamless payment experience. The predicted rise in mobile commerce is a strong vote of confidence for the security and convenience of the UK’s digital payments.

Worldpay’s report, which examines online shopping in 36 countries across five continents, found that m-commerce currently accounts for 38 percent of the £990 billion in global eCommerce sales, and global m-commerce is set to grow a staggering 19 percent over the next five years.

The largest markets in the world for m-commerce are China (£0.57 trillion), U.S. (£0.16 trillion), UK (£48.8 billion), Japan (£26.4 billion) and South Korea (£22 billion).

Motie Bring, general manager for the UK, Global Enterprise eCommerce, at Worldpay Inc. said: “The UK in particular is a highly-developed market, and with 99 percent of the population connected to the internet[1], e-wallets are clearly the future of mobile commerce for shoppers – but this is only the beginning. The latest innovations in device hardware, from voice recognition to facial scanning, are helping make payments more seamless and secure than ever before, prompting consumers to ditch desktop in favour of their smartphone or tablet.

To stay ahead UK merchants should invest in their own apps, building a seamless shopping and checkout experience across every device, and support the most popular payment methods.”

Worldpay has published guidelines for merchants to help capitalise on the global mCommerce opportunity:

  1. Consider developing a branded app. We know that 71 percent of shoppers prefer apps over mobile browsers when shopping on their smartphone, and many say they won’t buy from a business that doesn’t have an app.[2] It’s no longer enough to just have a mobile-optimised website – if you’re not prioritising a transactional app for your brand, you’re not putting your best foot forward.
  1. Make it easy and use biometrics to speed up the journey. Shoppers are becoming increasingly familiar with the concept of fingerprint scanning and facial recognition, so they do not shy away from using these methods as a form of authentication. Biometrics place payments at the back of the user’s mind, giving them a faster and friction-free experience, making the payment seem ‘invisible’.
  1. Identify the most popular payment methods in each territory in which you operate. There are huge differences in payment preferences across the world, and alternative payment methods are gaining share over traditional credit and debit cards. There’s no one-size-fits-all in any region so you’ll need to understand the best options for your company.

Online retailers ‘not using own data to improve performance’

Online sellers are using eCommerce solutions to gather better data insights, yet many are failing to use it to make better business decisions, according to new research.

Whilst 42% are using data to improve customer service, only 24% are using data for buying behaviour analysis and two thirds are not using it to improve the user experience.

The survey of 559 global B2B organisations by Sana Commerce found that many are still only focused on using e-commerce for sales and improving online shopping for customers – traits associated with e-commerce 1.0 and 2.0.

48% identified driving sales as the top priority for their e-commerce solution and 38% said it was to improve the user experience.

Despite having data available at their fingertips, online sellers are not using their data to achieve desired business performance outcomes. The main response to tackling competition is competing on price (47%) and increasing the online customer experience (38%) rather than enhancing the proposition.

Only a third said they would use data to improve personalisation and 26% said they would use data to improve targeting and account-based marketing.

Sana says many online sellers seem to be overlooking the true value of e-commerce 3.0 and improving integration with key business systems such as the ERP to drive broader business benefits.

Michiel Schipperus, CEO and managing partner at Sana Commerce, said: “It’s encouraging to see online sellers building on their digital transformation strategies and considering the implementation of these advanced technologies, but it’s important to first establish how they can be implemented strategically. E-commerce 3.0 has enabled better integration between internal systems as a growth strategy and way to improve businesses agility. M2M and other forms of automation represent a significant investment, so e-commerce businesses need to ensure they’re being used to their full potential and improving key business drivers.”

The survey of B2B organisations in Europe and the US was undertaken by independent market research company Sapio on behalf on Sana Commerce. You can download the report here.

Modest Christmas cheer for UK retail with £99bn ‘golden quarter’ sales forecast

Bucking the current gloomy trends, GlobalData has forecast that total UK retail sales in Q4 will rise by 2.0% to £98.8bn.

Food & grocery spend is set to drive this, as food inflation leads to a 2.5% increase in this category, while Non-food spend is forecast to grow at 1.6%, with health & beauty predicted to be the best performing retail sector.

GlobalData says that while it has been a year of retail failures, profit warnings and store closures so far, the ‘golden quarter’ offers retailers the opportunity to gain sales from consumers who are finally ready to prioritise shopping.

However, it cautions that low consumer confidence and confusion over Brexit will inhibit big-ticket spend, and that trading down to value retailers is becoming more widespread, due to the rapid store expansion of players such as B&M and Home Bargains.

Food & grocery

GlobalData says growth within food & grocery will slow to 2.5% this Christmas, against an inflation-driven comparative in Q4 2017 (3.6%), as food inflation falls.

Both food and alcoholic beverages will see a significant fall in volume growth compared to Q4 2017, as consumers trade down in both of these categories.

However, it says food is more resilient to low consumer confidence than other retail sectors due to its essential nature. Expected trends that retailers will focus on over Christmas include alcohol-free beverages (e.g. flavoured tonic waters), specialist teas, and plant-based protein side dishes (e.g. lentils, quinoa, chickpeas & tofu).

Fashion & beauty

It has been a less than stellar year for many clothing retailers and Q4 will be no different, according to GlobalData. Midmarket players are expected to be left out in the cold once again as shoppers trade up for enhanced quality, making it yet another challenging Christmas ahead for clothing market leader M&S.

Giving shoppers a reason to make wants-driven purchases, and forgo spending on other categories, through compelling product and value for money will be the key to a successful festive season. Online pureplays such as ASOS and boohoo are likely to be the biggest winners this Christmas given their potent mix of discounts, and fast and convenient fulfilment.

Health & beauty remains a ‘winner’ at Christmas and shoppers are expected to splurge on premium lines for both gifting and self-treating. This is helped by a wider choice of brands and greater shopper knowledge, especially in terms of ingredients. With the appeal of department stores on the wane, we expect online pureplays to take advantage, luring shoppers in with discounts and loyalty schemes.

Electricals & entertainment

With Q4 accounting for a third of annual electricals spend, GlobalData says the period offers retailers the best opportunity to capture spend as shoppers benefit from discounting periods such as Black Friday and early Boxing Day sales. Less generous discounting last year deterred shoppers from splurging on these occasions, but volumes are forecast to grow this year as cost prices level.

Mobile phones, laptops and tablets will offer the greatest growth potential for retailers, with Apple releasing its budget-friendly iPhone XR and MacBook Air in the period. While Apple is still much more expensive than its competitors, these new releases offer retailers an opportunity to entice less-affluent shoppers to trade up when buying gifts during the festive season.

In entertainment, the release of Red Dead Redemption 2 this month has been highly anticipated and is likely to drive spend in Christmas gifting. More Nintendo Switch games are available this year which is necessary to mitigate the lack of a stand-out new console.

Home

The home category, which includes furniture and floorcoverings, homewares, and DIY and gardening is forecast by GlobalData to grow 0.6% in the final quarter of 2018 compared with the previous year. Much of this growth will come from homewares (+1.4% year-on-year), which has been more resilient in 2018 than other home categories; consumers have sought to refresh their homes, and interest in interior design has grown through social media and fashion retailers’ own home collections. The effects of the latter should be particularly notable over the seasonal period.

Online

Capping off a strong year for the UK online market in which multichannel retailers have consistently reported robust digital growth, Christmas is set to be the icing on the cake with more consumers than ever choosing to buy online for the festive period, according to GlobalData.

It says online pureplays will prove popular again this year thanks to their best-in-class shopping experience. Amazon is set to remain a top choice for gift purchases as its broad product range appeals, and as Amazon Prime subscribers turn to the retailer as their first port of call.

Online spend will be bolstered this Christmas by Instagram’s shopping function, which launched this year, as well as Pinterest featuring direct links to retailers’ product pages. The ease of purchase through social media will drive impulse purchases of partywear as well as gifts across sectors.

Summer hangover impacts UK retail sales in September

UK retail sales decreased by 0.2% on a like-for-like basis in September, compared to a 1.9% rise in the year earlier period, according to latest figures from the BRC and KPMG.

On a total basis, sales increased 0.7% in September, against an increase of 2.3% in September 2017. This is the lowest since October, excluding Easter distortions, and below the 3-month and 12-month averages of 1.2% and 1.3% respectively.

Over the three months to September, In-store sales of Non-Food items declined 2.7% on a total basis and 4.0% on a like-for-like basis. This is in line with the 12-month total average decline of 2.7%.

Over the three months to September, Food sales increased 2.3% on a like-for-like basis and 3.4% on a total basis. This is below the 12-month total average growth of 3.7%.

Over the three-months to September, Non-Food retail sales in the UK decreased 1.6% on a like-for-like basis and 0.6% on a Total basis. This is in line with the 12-month Total average decrease of 0.5%. September Non-Food sales remained in decline.

Online sales of Non-Food products grew 5.4% in September, against a growth of 10.7% in September 2017, the second-best growth of 2017. This is the lowest growth since January and below the 3-month and 12-month averages of 6.7% and 7.1% respectively.

Online penetration rate increased from 22.7% to 24.2% in September 2018.

Helen Dickinson OBE, Chief Executive at the British Retail Consortium, said: “These figures lay bare the difficult operating environment for the retail industry. After a challenging August, constrained consumer spending in September has resulted in the weakest sales growth for five months.

“The retail industry pays a disproportionate amount of tax. It represents 5% of the economy but pays 10% of business tax and almost 25% of business rates. A tax system skewed towards high taxes on people and property is contributing to stores closures and job losses and is stalling the successful reinvention of our high streets.

“Taxes apply to all businesses, so the answer is not additional taxes solely on the retail industry. The Government urgently needs to reduce the business rates burden and create a tax system fit for the 21st century that more fairly distributes taxes right across the economy.”

Paul Martin, UK Head of Retail at KPMG, said: “Like-for-like retail sales in September were down 0.2 per cent on this time last year, but then last year consumers were remaining more defiant in the face of Brexit and shopping regardless.

“Grocery continued to perform, but growth in the category retreated in September. The non-food categories however, continued to disappoint. The historically reliable back-to-school push did not elevate apparel sales. Instead the latest tech launches were a rare source for optimism.

“Online retail continued to fare better. Even clothing sales managed to grab the attention of those browsing the web to refresh their wardrobe.

“The final golden quarter of the year marks the ultimate test for many players, but retailers must also successfully navigate: the upcoming government Budget, Black Friday, Christmas, and of course Brexit.”

Jon Woolven, Strategy and Innovation Director at IGD, said: “The September food and grocery figures cemented the trend in late August for volumes to fall versus 2017, although with some inflation in the mix, sales value remained modestly in growth.

“Shopper confidence has followed a downward path with those expecting to be financially better off over the year ahead dipping from 26 per cent in July to 22 per cent in September. Brexit related uncertainty probably plays a part in this, so retailers will be hoping for a clear resolution ahead of the Christmas shopping season.”

UK consumers ‘experience emotional and physical pressure’ over delivery practices

A YouGov survey commissioned by Localz has shown that nearly 1 in 10 UK consumers are too scared to use the toilet when waiting for a delivery, for fear of missing it.

The findings from the inaugural 2018 ICurve Report explore the public’s concerns about the current state of last-mile delivery, highlighting the stresses and concerns consumers have as a result of online delivery and on-site utility services.

Among the highlights, 71% of respondents cited physical and emotional disturbance around delivery appointments. 40% of respondents felt stress and anxiety whilst they waited for a service or parcel delivery, 13% were forced to cancel social plans, 11% experienced disrupted sleep and 7% felt uncomfortable using the toilet.

According to the report, based on 2,000 respondents across the UK, 75% of overall respondents are available for delivery availability between 05:00, until 22:00. This extended window for deliveries is in contrast with the set up for typical delivery firms who typically operate between 07.30 and 19.30, a twelve hour window which still misses out on 42% of shopper-acceptable delivery times.

Not all delivery times are equal. Over half of those polled, 53%, want specific delivery slots which are the least disruptive to their personal life and 30% want those least disruptive to the worklife. 65% of respondents who work full time prefer delivery services between 18:00 – 20:00, meaning for this typically busy, and high-spending demographic, most existing delivery services do not work. Other report findings of interest to providers include:

  • 60% of respondents said they would like to be able to live track their delivery.

  • 86% mentioned they would rather communicate directly with the delivery person and have the liberty to change the delivery day and date.

  • 75% of consumers want to know exactly when to expect their parcel.

  • 36% of consumers today want the ability to change the location of their delivery, to a neighbour, work address, or similar, on the day.

  • 53% of respondents said the would greatly benefit if they had the opportunity to directly communicate with the delivery person.

  • 72% of respondents would rather be physically present or have someone else at home to oversee the delivery service person when receiving a delivery or service.

The report also revealed the darker ramifications of current delivery practices, specifically the effects deliveries have on consumers’ work-life balance and mental wellbeing. 32% of respondents who work full or part-time had to take official leave to wait for a delivery. Moreover, more than one in five said it cost them money as they could not go to work due to a service or parcel delivery. With 75% of the UK population currently in full or part time employment, having flexibility is becoming increasingly important.

UK retail split over bricks & mortar property strategy

The UK retail sector is split in a three way divide over what to do with bricks and mortar property, according to a report from law firm Foot Anstey.

Despite news of store closures and Company Voluntary Agreements, a surprising two thirds of senior retail sector leaders plan to either invest in new property or develop their property portfolio. Just one third plan to close stores.

And of that one third looking to downsize, just 12% are blaming the rise of eCommerce.

The findings are detailed in the Foot Anstey Retail Report 2018: Property based on an in-depth survey of senior leaders in the UK retail sector.

Foot Anstey’s Head of Retail, Patrick Howarth, said: “It’s fair to say we were not expecting this result to come back. Anyone following retail news would be certain the story would be of restructure.

“That two thirds are looking to grow their portfolio or develop it is perhaps a reflection of something we spotted in the last report – retailers believe shopper experience is the most important factor, even more than price.

“Perhaps most importantly, there’s a reassuring resilience to the sector. It clearly believes in remaining a profitable, physical presence in our lives.”

Other findings from the survey include:

  • 42% find break clauses and subletting legal obstacles to reshaping a portfolio
  • Robots in customer service got the biggest negative response for any tech innovation
  • Almost half think delivery drones will become significant

This is the second Foot Anstey Retail Report 2018. The first, People, was issued in June. The third, Brand will be issued later in the year.

Card payments account for 75% of retail sales

The value of retail purchases made by card now accounts for more than three quarters of all UK retail sales, according to the BRC’s annual Payments Survey.

This has partly been driven by UK customers increasingly using cards for lower value payments, traditionally dominated by cash.

Cash fell again by more than 1% in 2017, accounting for just 22% of all retail sales.

As card payments have become more dominant, retailers have expressed concern at the rising costs of accepting cards.

However, the survey also revealed that retailers spent an additional £170 million to process card payments in 2017, reaching almost £1 billion for the year.

The research showed that increasing costs have been driven entirely by card scheme fees, which jumped by 39% in 2017. The scheme fee increases to retailers in 2018 range between 30% and 100% for some transactions.

The BRC is calling for action from the Government and the Regulator to address the problem of soaring scheme fees borne by businesses, large and small, which come at a time when retailers are facing cost pressures elsewhere.

Key findings in summary:

  • The BRC Payments Survey data is a sample from 48 per cent of the entire retail industry.
  • The 2018 Survey looks at the methods of payment UK shoppers are using when buying goods in store and online, how this differs from previous years and the average cost to the retailer for handling each method of payment.
  • Total UK retail sales rose by 4.3 per cent in 2017 to £366 billion (2016: c. £351 billion)
  • There were almost 20 billion retail transactions overall in 2017 (2016: c. 19 billion)

BRC Head of Payments and Consumer Credit Andrew Cregan, said“EU payment regulation introduced in 2015 delivered savings for the retail industry and consumers, but these benefits have now been eroded by increases in other card fees. In fact many smaller retailers have questioned whether savings were ever passed on by card companies. The BRC are now looking to the Government and Regulator to tackle the alarming increases to card scheme fees imposed on retailers, and for action to simplify the complex fees and charges levied by the card payments industry.”

READ THE REPORT HERE

eCommerce gains ground in technical consumer goods markets

In the first half year of 2018 eCommerce accounted for approximately a third of the total value of technical consumer goods (TCG) sold globally to consumers.

Across 18 European countries* though, online shares are still below that mark at currently 25 percent, according to the latest numbers from market tracker GfK.

However, European e-commerce retailers were able to steadily increase their shares over the past years (2015: 21 percent). This is because not all product categories are equally popular when it comes to buying online. This may change as the European online retail sector is undergoing a massive change.

On a regional level, APAC and foremost China were driving global online sales. Chinese e-commerce retailers enjoyed significant double-digit growth at nearly 23 percent. In the first half of 2018, the online share of technical consumer goods sales in China reached over 30 percent.

Unlike the US and Europe, where internet penetration levels are at 80 percent or higher in most countries, China’s internet penetration is still low at 55 percent as much of its population is located rurally.

However, further investments into China’s infrastructure will set the ground for further growth of internet usage and thus online sales. As much as internet adoption in China is a great challenge, at the same time it reveals a huge growth potential for China’s e-commerce giants.

China today already has the biggest internet community with 773 million internet users in a total population of 1.4 billion – growing year by year. This growth will open doors to new money for Chinese online retailers – increasing their global power for investments and expansion into the European market.

European e-commerce market accelerates

In Europe, at least for the start, Chinese e-commerce giants are expected to be focusing on product categories where other competitors have left space or where product categories are lagging behind for online sales. Today’s consumers in the 18 observed European countries are feeling most comfortable buying IT products online (online share: 38 percent) over other product types.

However, less popular online category sectors such as Telecommunication (online share: 21 percent), Consumer Electronics (online share: 22 percent) and Small Domestic Appliances (online share: 28 percent) are again showing high levels of online growth in the first half year 2018  – making these the product sectors to watch for increasing levels of online sales activities.

Mobile devices will be further spurring the e-commerce market

For a growing number of tech-savvy, time-poor consumers, shopping from a smartphone or tablet is becoming an increasingly popular way to buy online. For more than every second technical durable goods shopper in 2018, ‘their mobile device is becoming their most important shopping tool’ with a significant upward trend (2015: 40 percent), according to a recent GfK study.

Again, the Chinese e-commerce giants are well positioned in the area of m-commerce through many years of experience in their home markets. Buying mobile is already mainstream in China, and for more than 80 percent of all technical durable goods shoppers in China, their smartphone or tablet is the preferred shopping device (GfK study from 2018).

Key retail players in Europe with a competitive advantage

Strong alliances amongst key players in Europe will be able to address these new challenges in the retail sector. Partnering retailers will take competitive advantage of their unique omnichannel selling propositions – allowing them to bring the best on- and offline shopping experience to their customers through new technologies, joint innovation activities, and co-investments into big data analytics.

As much as the ongoing changes in Europe can be seen as most disruptive for technical consumer goods retailing, ‘traditional’ retail has not lost its attraction: The percentage of consumers who believe that physical stores today are less important than a few years ago has not changed over time (2015: 43 percent vs 2018: 43 percent).