Close this search box.

EDITORIAL Preparing for a post-peak plunge: how retailers plan to see off the January blues

Every Christmas, there are a raft of predictions that this year customers won’t buy as much and sales will be down on the year before. Almost always this never comes to pass. This year, the retail industry seemed certain to prove the doom mongers right, with the cost-of-living crisis, rising inflation, war in Ukraine, flu, strikes and a cold snap all seeming to conspire to make this the worst Christmas ever.

However, despite these headwinds, gale force as they may be, consumers did, eventually, start spending and have managed to deliver $1.14trn in online sales, way ahead of some of the more bleak predictions ahead of Christmas. Christmas spirit, bottled or otherwise, has that effect on people.

The problem is that the doom mongers’ vision may yet come to pass, post-peak. Sainsbury’s may well have had an excellent festive season selling turkey and all the trimmings, but it too is preparing for a severe snapping shut of consumer purses in the next three months. 

IKEA, too, is warning that sales of homewares and furnishings are going to be particularly badly hit, with a third of consumers planning to call a halt to any home renovation plans. 

The other bombshell is that returns from the Christmas period are about to hit an all-time high, with some 13% of all online purchases likely to be sent back – a 63% rise on last year. 

In fact, the problem of mass returns has prompted one academic to warn retailers that they need to be ‘less nice’ about returns policies, or risk a deluge of returns, not just post peak, but from now on. 

One curious upshot, however, of the squeeze that is upon the industry is that those firms that have promoted buying and selling of second-hand and pre-loved goods are likely to do ok. 

The second-hand and thrift market globally is set to be worth more than £150bn this  year, with more than a quarter of UK consumers saying that the sold an item on a second-hand virtual marketplace in the last six months and 31% saying that they have shopped for second-hand online in the past year.

This has not been wasted on IKEA, which now sees potential growth in the month ahead from more heavily promoting its pre-loved and circular economy initiatives. If the customers are reluctant to spend on new to do up their homes, there is every chance that they will see pre-loved as more of a bargain – and a bargain with benefits, no less, as it also helps tick that sustainability box – helping it through these tough times.

The other approach being taken is to enhance customer experience in attempt to hold on to loyal customers. M&S, for instance, is capitalising on the return to stores seen across the past couple of quarters with a trial on virtual try on tech in two of its stores. The idea is that it gives shoppers a better in-store experience that they can also take away with them on their phone, as well as freeing up space on the shop floor for more goods. 

Halfords, meanwhile, is revamping its online offering to create a better experience and to help further leverage its growing Halfords loyalty scheme to create more of a Motoring Club feel for users. The thinking is that the better the offer, the more people will join and use the club, helping to generate growth even when people are reluctant to spend.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on