It has been nearly two decades in the making, and has taken a global pandemic to finally come to fruition, but 2020 is being touted as the first truly “eChristmas”, with online spending forecast to overtake physical store sales for the first time ever, topping £39.4bn.
According to research from ParcelHero, UK shoppers are expected to once again spend around £78bn on festive presents and food this year – with growing financial uncertainty keeping budgets similar to last year – but a far larger slice of the UK’s spend will be splashed online.
Royal Mail is already banking on a bumper “Covid Christmas” for online shopping, with plans to create a record number of temp jobs this year, to handle an anticipated surge in parcel deliveries from UK consumers stuck in lockdown from the second wave of Covid-19.
ParcelHero’s study shows Brits spent £25.43bn online and £53.15bn in stores last year, with head of consumer research David Jinks adding: “This year, our report shows the situation will be reversed and we’ll spend more online than offline in the first truly digital Christmas.”
The Office for National Statistics (ONS) reported online sales growth of 53% throughout September, which ParcelHero predicts will grow to 55% in October and rise to a record-breaking £39.41bn in December.
Jinks continued: “We don’t think it’s likely we’ll see a massively increased overall spend this Christmas, as people are concerned for their jobs because of the impact of Covid and Brexit. But assuming Brits spend roughly the same as last year, that means in-store shopping will drop to £39.17bn.”
Not that everyone is convinced, however. Research commissioned by VoucherCodes.co.uk and carried out by the Centre for Retail Research (CRR) predicts that just a third of all purchases will be online.
Online sales are expected to total £27.9bn, up by 20% (£5.6bn) compared to 2019 levels, while offline spend will drop 7% to £56.6bn, with the total spend coming in at £84.46bn, over £6bn higher than ParcelHero’s forecast.
The report also predicts spending among British consumers in the six weeks prior to Christmas will increase by 1.6%.
The study notes that a significant proportion of households will have more money than usual to spend at Christmas due to travel bans and pub curfews. It concluded: “Total retail sales in most countries have been fairly buoyant since the end of lockdown and there is no evidence yet that this is going to change.”
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