Deloitte Report Shows UK Consumers Will Spend £40.3 Billion This Christmas

Small and medium-sized businesses are set to benefit from growing consumer confidence, with a new report suggesting UK shoppers will spend £40.3 billion in the build-up to Christmas.

According to Deloitte's latest forecast, overall expenditure will increase by 3.5 per cent when compared with last year, with homeware and department stores expected to perform particularly strongly.

Many small retailers reported lean festive sales during the recessionary period, but the economy has started to improve in recent months, which seems to have encouraged consumers to spend money a little more freely.

The demand for online shopping services is very strong, with internet sales expected to top £5 billion this Christmas. Deloitte believes online retailers will benefit from a 19 per cent upturn in activity when compared with 2012.

Ian Geddes, UK head of retail at Deloitte, said: "The forecast will provide some Christmas cheer for retailers. Shoppers are expected to loosen purse strings off the back of rising consumer confidence and improving economic conditions."

He added that fast and flexible delivery will be key for online retailers this year.

"After last year's click-and-collect Christmas, consumers' expectations around flexible delivery over the coming festive period are higher than ever before," Mr Geddes continued.

Many internet shoppers now want store collection services as standard and companies that offer same-day delivery will also reap the rewards in the coming weeks.

Figures provided by Deloitte showed that more than one in three consumers in Britain would like to pick up small orders from a designated collection locker close to their home or job. Meanwhile, 47 per cent of survey respondents suggested that empty high street units would make for convenient drop-off points for goods.

Ben Perkins, head of consumer business research at Deloitte, thinks firms need to be creative when it comes to distributing items this Christmas.

He said more organisations are offering 90-minute delivery services, while a number of companies have also introduced drive-through pick-up points and collection lockers at underground stations.

Expert Opinion

Christmas obviously provides a strong opportunity for smaller retailers and it is vital that they are take advantage of consumer demand during the festive period. <br/> <br/>“Small firms are well-known for their innovation and I am very confident in their ability to ensure they have effective distribution channels in place. <br/> <br/>“SMEs will be excited about the challenges that lie ahead. A strong Christmas can provide an important platform for 2014 and it’s vital that businesses are thinking further ahead to ensure they remain one step ahead of their competitors, Part of this process involves anticipating new opportunities, as well as potential hurdles. Speaking to a legal expert who understand the SME market is a key part of this planning process.” <br/> <br/> Fergal Dowling - Partner