A couple of weeks ago, I pondered putting together something again about the Christmas 2021 retail season. Whilst there were strains over supply and labour availability, retailing seemed set for something much more normal.
At about the same time, the same idea occurred to the people running the Economics Observatory. I have produced two pieces for them before, the first on the initial impact of Covid on retailing and the second on Covid and Christmas 2020. This blog has featured these pieces as well (first and second). They also felt an update for Christmas 2021 was warranted.
Of course what then happened was the explosion of the Omicron variant, ‘Plan B’ in England, the reintroduction of restrictions on retailing and hospitality in Scotland and Wales and a general sense of nervousness and caution. And that seems not likely to be the end point.
To that can also be added ongoing stresses and strains in the supply chain due both to Brexit and Covid, a 10 year high inflation rate driven by energy and fuel costs rising, an interest rate rise from the Bank of England and general concern over the sector and economic position.
Merry Christmas, everyone.
So I pressed on, and my Economics Observatory piece is published today and can be found here. I do not intend to replicate it here in full in this post, but I will try to summarise briefly the lines of argument.
Christmas is vital for retailers and the run-up this year has been anything but smooth. The patterns of sales by sector, place and channel remain affected by the pandemic. Operational challenges for retailers abound and will be added to by the new variant, isolation and the new regulations. Retailers have gone to great lengths to keep retailing safe, operational and interesting in the run-up to Christmas. But there is no doubt that there is more nervousness around than a few weeks ago, and uncertainty has returned.
We are though in a much better position than we were a year ago, and consumer confidence levels have been higher. Yes, there are concerns and we do not know how things will pan out with Omicron. Vaccines and boosters though are at high levels and people seem to be respectful of the challenges, the steps taken and the need to be careful. They are making their own choices to reduce activity. Whilst ‘lockdown’ is being bandied about, with sense we may be able to avoid the retail lockdowns of the last 21 months.
Christmas may not be normal again this year, but it will be better than last year hopefully. Much of the Christmas purchasing has taken place or is in place ahead of the weekend. There are great retailers, local and independent and others, doing all they can to deliver a great Christmas in what have been difficult circumstances. They need your support.
The full Economics Observatory piece with a lot more detail, data and discussion can be accessed here.