The UK’s traditional Boxing Day sales witnessed a significant decline in foot traffic in 2023, largely due to the increasing trend of online shopping and enticing digital deals. Many prominent retailers opted to stay closed this year, further contributing to the dip in in-store shopping.
Financial turmoil is plaguing several UK retailers following the subdued shopping activity on Boxing Day. Recent data from corporate restructuring company Begbies Traynor indicates that the number of retailers facing significant financial strain surged by over 25% in the last quarter.
In the initial 11 weeks of the last quarter of 2024, around 2,124 retailers were experiencing financial pressure. This figure marks a slight decline from the previous year’s 2,142 but remains alarmingly high compared to the 1,696 reported in the third quarter of 2024.
This increase underscores the ongoing issues with consumer confidence in the UK, which are being exacerbated by rising interest rates, persistent inflation, and geopolitical uncertainties. Retailers are also grappling with heightened operational costs and labour expenses, adding to the challenges presented by dwindling consumer spending, particularly for large-ticket items.
Julie Palmer, a partner at Begbies Traynor, pointed out to The Guardian that, “The weaker-than-expected retail sales performance in November, typically a crucial month for the sector, highlights the tough trading conditions, as consumers delay purchases amid low confidence and escalating prices.”
She further noted, “Adding to this uncertainty, the measures announced in the Autumn Budget, including the planned increase to employers’ National Insurance Contributions, will significantly ramp up the challenges these businesses face. With increases to the minimum wage, cash flow will take a hit, leading us to anticipate elevated insolvency levels within the sector through 2025. Even more resilient companies will face relentless pressure and will likely encounter financial hardships next year as they navigate these compounded challenges.”
Declining Boxing Day Foot Traffic: A Significant Challenge for UK Retailers
This year, UK retail foot traffic on Boxing Day fell by 4.9% across all shopping destinations when compared to 2023, according to MRI Software data. High streets saw an even steeper decline, with foot traffic down 6.2%, while shopping centers experienced a drop of 4.2%.
A number of major retailers, including John Lewis, Next, Marks & Spencer, and Aldi, typically choose to remain closed on Boxing Day. This closure discourages shoppers from venturing out into the cold and damp weather in search of bargains.
Furthermore, there seems to be a cultural shift regarding Boxing Day itself, as it transitions from a day known for extensive holiday sales to one focused more on recovering from Christmas, spending quality time with loved ones, and traveling.
The trend toward online shopping continues to rise, with consumers increasingly preferring the convenience of shopping from home rather than battling crowds, long lines, and traffic. Shopping online not only offers a broader selection but is often less expensive and quicker than in-store alternatives. With retailers providing deeper discounts throughout the year, including during the holiday season, this strategy reflects a desperate attempt to lure consumers back and uplift sales.
Although this approach has yielded positive results for some, it has diminished the appeal of traditional year-end sales, overshadowed by frequent online promotions and discounts.
Photo credit & article inspired by: Euronews
