The UK retailers are all set to offer substantial discounts during the festive season to rescue the market from suffering huge losses. Also, they are thinking to promote their products online.

As per British Retail Consortium (BRC), Christmas-related retail expenditure is anticipated to reach £12 Billion ($24.7 billion) in 2007, high by 5% from 2006, but only after slashing prices and increase in store spaces, and the news published by Forbes.

The increase in sales of Christmas-related products should be around 3% as revealed by BRC. Christmas grocery sales and other festive products are anticipated to rise by 4% to £1.07 Billion ($1.6 Billion) from 2006. Every household is projected to expend around £169 on food and drinks on Christmas, resulting in a hike in the average cost of Christmas lunch to nearly £16 per head, as compared to £14 in 2006.

The retail sector in the UK has been put under pressure after the summer washout and jitters given by a global credit crisis. Towering interest rates are not helping consumers who are suffering from inflation in food rates and increased household bills.

As per the office of National statistics, there was a decline in the UK retail sales of 0.1% in October 2007, in comparison to a hike of 0.3% in September 2007. However, industry experts say that with latest fall in the confidence of consumers and decline in spending power, the annual growth of this year 2007 is most probably going to be driven by discounts.

Moreover, the busy lifestyle of Brits is keeping them from market. Thus, in addition to discounts, many retailers are thinking of shifting to online promotion like vouchers. Many big retailers have their own websites and most offer discounts for consumers who like to shop online.

The expansion in the retail sector is sure to bring back the lost confidence of many retailers. However, the conditions of commercial activities are still not as per what retailers and consumers have anticipated. Banks are not displaying any leniency in their policies. Hence, it is likely that the increase in sales is short-lived.

As per a Research Analyst at RNCOS, “Retail industry in the UK is undergoing a period of loss. The festive season this year should be an opportunity for them to grow. This, however, may be temporary relief, as the feel-good factor is not expected to last long with consumers struggling to cope up with heavy expenditures in the New Year (2008) straight after Christmas.”

Related Market Research Reports:
Middle East Retail Sector Analysis (2007-2010)
Poland Retail Analysis (2008-2012)
Vietnam Retail Analysis (2008-2012)