Don’t feel guilty about a commercial Christmas

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provides the economy with a vital boost

The “commercialization” of Christmas has long been a feature of the season. Although there have been significant changes in seasonal shopping habits over the past decade, (such as online stores and the introduction of “Black Friday”) the practice of buying gifts, bringing a commercial element to festivities, is a well-established tradition. 

The Great Exhibition of 1851 in London was a showcase of consumer goods from around the world, and a catalyst for a new style of consumerism. In particular, this was the golden age of the “department store” which coincided with the development of other Victorian habits that encouraged the commercialization of Christmas. 

Christmas crackers, for example, were invented by a Victorian confectioner in 1848, as a new way to sell sweets. In the 1880s, the practice of sending Christmas cards had become so popular that 11.5 million cards were produced every year. Gift giving, which had traditionally been a way of celebrating the New Year, also moved to Christmas.

Department stores including Harrods and Selfridges embraced this idea, with lavish window displays and opportunities to visit Santa in a grotto. So shopping for gifts at Christmas time is clearly a well-established tradition. And it has also long been something that provides a real boost to both the retail sector and the wider economy.

The British Retail Consortium expects total spending of about £82 billion in November and December 2019. This would be a modest 2% increase from the same two months in 2018 when the ONS reported sales of over £80 billion.

But not all shopping traditions work in retail’s favour. “Christmas creep” describes the increasing trend of major retailers moving the start of their advertising and promotional activities ever earlier to exploit the commercialized status of Christmas — in some cases as early as the first week of November. 

Much of this is linked to the Black Friday concept started in the US. The fourth Friday of November has become a focal point of significant discounts both online and in-store. 

But the increase in discounted sales over Black Friday weekend has effectively just pulled forward sales from the following weeks and the immediate run up to Christmas. Back in 2013, retail spending grew steadily throughout November until mid-December and then fell away. But in the past two festive periods, the Black Friday effect has redistributed, and brought forward, significant levels of Christmas purchasing into November. 

Sale and return

A survey in January 2019 released by the British Retail Consortium showed that retailers had failed to increase the overall Christmas spending for the first time since the depths of the global financial crisis over a decade ago.

Figures reflected the heavy discounting by retailers, both in the run-up to Christmas and Boxing Day sales. The real impact of this on profit margins, as well as the additional costs involved in managing Christmas gift returns, became clear when major retailers subsequently announced their sales and profit results. 

As far as Christmas 2019 is concerned, recent research indicates that the struggling UK retail sector may not get the Christmas sales boost it really needs, as once again many customers did the majority of their festive shopping during November’s Black Friday sales. So, if you are shopping for last minute bargains, or splashing out on New Year sales, don’t feel too guilty. Your seasonal spending spree provides vital support to the retail sector and the wider economy.

Nelson Blackley is Senior Research Associate, Nottingham Business School, Nottingham Trent University. A version of this article first appeared in The Conversation UK and has been reprinted under special arrangement.