Late Christmas shopping rush predicted
KPMG believes early concerns unfounded
December 19 2002
Most UK retailers should enjoy strong sales in the last week before Christmas, according to retail analyst KPMG.
Despite early discounting by some retailers, and concern in sectors such as computer games, which led retailer GAME to downgrade profit forecast earlier this week, KPMG said its discussions with retailers indicated that shoppers are now coming out in force.
Clothing is selling well, although the strongest sales are being seen in younger fashions and the high street retailers rather the top end fashion brands. Consumer electronics are selling steadily, led by DVD players, and widescreen and plasma TV. However, recordable DVD has not taken off as quickly and its developers expected, partly due to the relatively high price and partly due to consumer concern about the three different, and incompatible, formats on the market.
Amanda Aldridge, head of retail at KPMG, said: “Home furnishings are also selling very well, although it’s hard to tell whether that’s because they’re being bought as presents or because consumer are sprucing up their homes for the festivities. The ‘Changing Rooms’ factor is increasingly important.”
The fact that many offices and places of work are effectively closing on Friday, December 20, is also good news. “With four clear shopping days after Friday, many retailers are expecting a late surge which is likely to compensate for slower sales earlier in December.”
The reported poor sales in the computer game market are attributable Io the lack of new consoles on offer – last year saw the launch of both Microsoft Xbox and Nintendo Gamecube: “all the evidence from previous years is that new hardware drives sales.”
Aldridge concluded: “There is a lot of discounting out there. From our discussions with retailers, it seems that older consumer are more cautious, perhaps due to concerns about pensions and savings, which is affecting sales of top end branded goods, while younger people, encouraged by low interest rates, are spending well.”
