Last year's UK Black Friday and Christmas sales showed a mixed performance. Despite a strong Black Friday, the entire 2024 festive period was somewhat lacklustre for retailers, with overall sales growth for the last three months of the year being only 0.4% higher than figures posted in 2023.
Black Friday and the run-up to Christmas – often referred to as the ‘Golden Quarter’ – are vital for UK retailers, with the period accounting for a significant share of annual sales.
According to Dave Hands, Managing Director at logistics, transport and shipping specialist LTS Global Solutions, he is projecting a 30% spike in warehousing demand ahead of the festive season, potentially signalling an optimistic outlook for retailers aiming to rebound from last year’s challenges and fluctuating sales performances.
Dave Hands commented: “There is certainly a quiet confidence among our retail customers as they gear up for the festive season that this year’s sales performance over peak will surpass last year’s numbers, despite consumer spending confidence remaining somewhat dubious, especially as the budget will be announced in late November.
“From working with our retail customers closely over the summer we’re projecting that storage requirements will increase by a sizeable percentage which wasn’t necessarily the case last year, this is a positive sign for both the retail market as a whole and the warehousing sector, which have both limped through recent peak seasons under the weight of external challenges.
“Retailers are acutely aware of the issues faced in 2024 and are going into peak with a slightly different mindset, especially regarding stock management and how much to hold for how long. Supply chain difficulties and how consumers are approaching the holiday season has somewhat changed and it’s been a learning curve for everyone. For us in particular, it has been about ensuring that we can keep pace with that change and are flexible enough operationally to cater to market demands of today, not yesterday, last week or last year.”
While last year’s downturn in retail sales over Christmas in particular was mostly driven by the ongoing cost of living crisis, Dave Hands goes on to say that in recent years, forecasting demand against managing stock has become increasingly challenging for both retailers and their logistics partners due to the unpredictability of not only the marketplace, but the wider supply chain.
Logistical challenges in particular compounded the situation – with issues such as stockouts, delays, and shifts in consumer behaviour impacting the retail sector’s ability to capitalise on peak season demand.
“Last year, many were looking to strike a fine balance of ensuring they have enough stock available to meet demand, but also so they weren’t overstocked to the point where they were left with excess inventory post-season while incurring unnecessary logistics and storage costs”, Dave continued.
“While some will inevitably be looking to secure warehouse space much earlier this year to meet consumer expectations during the Golden Quarter, there’s also other variables which we are observing within the market that are actively contributing to this.
“For instance, more businesses across the retail are stretching out seasonal promotions over a longer period to give consumers more time to shop and spread out their spending which is driving a more sustained demand curve, and in turn, another facet potentially contributing to the capacity spike we’re seeing in warehousing in this quarter.”
