Small is beautiful

Britain’s small shops beat the big chains during a bumper Christmas shopping season

January 17, 2014
Obsession
How We Buy
January 17, 2014

We recently reported on how Brits are among the world’s most enthusiastic Christmas shoppers. They lived up to their reputation during the latest holiday shopping season, with new data showing bumper December retail sales in the UK.

The country saw the strongest annual growth in nine years. By value, seasonally adjusted retail sales jumped by 6.1% in December, when compared with the previous year. Most analysts expected growth only half as strong.

At first glance, the data don’t square with the weak holiday trading results reported by some of the country’s largest retailers, including Tesco and Marks & Spencer. The details show why: Smaller stores trounced their bigger rivals over the holidays, in terms of growth.

Annual-growth-in-UK-retail-sales-by-size-of-retailer-Dec-13_chartbuilder

This is encouraging news for campaigners against the spread of chains in city centers and the proliferation of out-of-town malls across Britain. But instead of a mom-and-pop shop revolution, it may simply signal another area in which British consumers excel: Online shopping. Internet retail sales rose by around 12% in December. Online sales now account for 11.8% of total sales in the UK.

Share-of-retail-sales-purchased-online-in-the-UK-sales_chartbuilder

Brits’ enthusiasm for online shopping—which is down, at least in part, to the country’s consistently horrible weather—opens the door for smaller firms to boost sales without big overheads. But don’t think that the bigger players are ignoring this trend. Web-savvy department stores like John Lewis reported robust Christmas sales. Online laggards, like Morrisons, are now scrambling to follow suit as they see their sales slide. The Davids of retailing may have got one over on the Goliaths this time, but the fight next Christmas is sure to be tougher.

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