UK DIY News
Gifting Retailers Set For Tough Christmas Trading
- The online gifts category is down -12.5% YoY so far in 2023
- Over Black Friday week, IMRG anticipates a decline of -11% in revenue for gifts
- Multichannel gifting retailers, and those selling in multiple categories, are seeing more positive performance
With just 10 weeks to go until Christmas Day, IMRG has analysed the prospects for gifting retailers to have a positive trading period online. The gifts category has faced considerable challenges since an initial surge during the lockdowns in 2020 and, while there is some variance by tier, the overall signs are not positive.
Recently it appeared that things might looking up for online retail. According to IMRG's Online Retail Index, which tracks the online sales performance of over 200 retailers across the UK, August 2023 recorded the first positive year-on-year (YoY) growth for total online revenue in 29 months, at +1.3%. However, September’s results shifted back to negative territory at -3.1% YoY.
Online gifting retailers are particularly feeling the pinch; revenue for the category declined -14.1% in Sep, with the year-to-date figure (YTD: Jan-Sep 2023 vs Jan-Sep 2022 YoY) down -12.5%, much sharper than IMRG’s start of year forecast of a -7% decline for gifts in 2023. Over the Black Friday week, a drop of -11% in sales for this category is expected.
As Christmas draws in close, many retailers hope their gifts category will experience positive growth; IMRG’s analysis shows that this might be the case for some retailers over others. The contrast is stark:
- The online gifts category for multichannel retailers saw a rise of +5.5% YoY, while the online-only retailers recorded their biggest decline of the year (-26.7%)
- Traffic for specialist gifting retailers is down -17.1% YTD, while those selling gifting alongside other categories have seen an increase of +4.3%
Andy Mulcahy, Strategy and Insight Director, IMRG: “We are seeing some real differences in online performance at the moment, with health & beauty retailers doing quite well in September (up 1.9% YoY), while for clothing revenue was down -9.1%. This means some retailers are overstocked as they have not been able to shift their products, and may be reflected in the breadth and depth of discounting promoted during November and Black Friday. For gifting retailers though, particularly those specialists selling online-only, the economic context has stifled demand and it is difficult to see anything other than tough Christmas trading for some.”
Source : IMRG
Image : Prostock-Studio / iStockphoto.com (624893634)
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