At just 1.4% growth, Q4 2016 will top off a dire year for the clothing and footwear sector, says Verdict

At just 1.4% growth, Q4 2016 will top off a dire year for the clothing and footwear sector, says Verdict

Another weak Christmas is in store for UK retail, with total retail sales likely to increase by 1.5% in the fourth quarter, down on the 1.8% growth recorded last year, new figures show. 

According to Verdict Retail, Christmas shoppers will continue to prioritise food, and health and beauty purchases, with clothing and footwear tipped for just 1.4% growth - the weakest since 2009 - as retailers have to work harder than ever to drive spend from reluctant shoppers. 

"Retailers face yet another weak Christmas, with overall sales up by just 1.5% in the fourth-quarter compared to the same period a year ago," notes Verdict's content director, Patrick O'Brien. "While price rises caused by the historically weak pound will be largely staved off until next year, low consumer confidence in the economy post-referendum will keep spending down unless retailers can convince shoppers to bring forward big-ticket purchases ahead of those anticipated rises.

"Retailers will attempt to hold their nerve and place less emphasis on Black Friday this year though, as experience has shown that it brings forward sales that would have otherwise been made at full-price, but those who have struggled throughout the year, especially clothing retailers, will offer major discounts."

With shoppers increasingly immune to discounting tactics, O'Brien says the focus will be firmly on the product, and retailers who benefit will be those who are able to communicate value for money via design detail, quality, and regular newness such as ASOS, Zara and John Lewis.

The plummeting pound is expected to provide "a bit of Christmas sparkle" as tourists take advantage of cheaper premium/luxury goods, benefiting retailers with strong international brand appeal such as Kurt Geiger, Burberry and Ted Baker.

Meanwhile, Verdict expects online sales to continue to grow much faster than overall retail, with Christmas gift shoppers being increasingly attracted to the convenience of 24-hour shopping.

"More retailers now offer click-and-collect and other collection options, and they have also invested in improving delivery services - offering same day and named day delivery as well as narrower time slots, making online shopping more attractive than ever," adds O'Brien.