0:05

Welcome to the Productivity Podcast . Back

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to talk about football in October

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, november and to touch on excuse

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me , christmas is down . We'll see

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you at Rental Intelligence and Insights

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.

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Hi Simon . How are you Not very good for the sound

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?

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I am full of the Christmas cold , so everybody

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listening needs to excuse my bunged

0:24

up sound , but yes , I have succumbed to the

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festive cold .

0:29

I managed to escape that one Christmas present .

0:32

Yeah , you don't want it . It wasn't particularly nice . It was

0:34

free , but not particularly nice

0:36

. Not particularly nice Anyway

0:38

. So it kind of exciting times . We've not

0:40

got all the data for Christmas , clearly

0:43

, because at the time we're recording we're

0:45

in that no-man's-lam between

0:47

Christmas and New Year , not sure what date it is

0:49

, what date it is , what time of day

0:51

it is . But we'll kind of touch on the lead-up

0:53

. But let's let you wind slightly to

0:56

November , which was Black

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Friday , if I recall .

0:59

Yep , november included Black Friday

1:02

, which was actually much

1:04

more muted than hoped for Not

1:06

surprising , given the economic challenges a

1:09

lot of households have been facing . Footfall

1:11

did go up . Inevitably

1:13

then , of course , spend will have gone up from the week before

1:16

, but

1:18

people , I think , are pretty cautious approach

1:21

around Black Friday . People still

1:23

value Black

1:25

Friday in terms of consumers , and there's also

1:27

always a lot of debate about

1:29

whether Black Friday offers good

1:31

value and real discounts . But I

1:33

think it's all about timing for consumers . Whilst

1:36

it may not be the best discounts in the

1:38

year , it's there , come at the right time

1:40

, so it offers opportunities for consumers

1:43

to spread their Christmas shopping and capture

1:45

some discounts . So footfall did go

1:47

up by about 8% from the week before , but not

1:49

huge . Of course , some

1:51

of that was online as well , but

1:54

I think

1:56

it probably saved November . The November

1:58

was flat on the year before

2:00

, so quite muted

2:02

in November .

2:04

And I think I've read quite a bit in the press

2:07

as well around the discounts

2:09

weren't necessarily as good

2:11

as previous years . So there

2:13

were lots of examples where actually , even

2:15

though it looked like it was a discount , the price had

2:17

been lower throughout the year . So

2:20

again , I think the retailers

2:22

have been more savvy with how they cut the price

2:25

or deliver the message .

2:26

Absolutely , and of course that's right

2:28

and that's fitting , because retailers have to adjust

2:31

to the economic situation , the level of stock

2:33

they're carrying , what they're aiming for for Christmas

2:35

, all those sorts of issues . But

2:37

for consumers , of course they

2:40

haven't got that

2:42

level of awareness necessarily as

2:44

to whether we're getting 15% now and we'd have got 20%

2:47

in April discount

2:49

. But of course they may not have had the budget

2:51

in April to buy the Christmas present that they were buying

2:53

in November . So if they get 15%

2:55

discount now , that's great for them . So

2:59

there's benefits both sides and it's

3:01

now clearly a very fixed event

3:03

in the retail calendar . It

3:05

kick starts the Christmas trading period . Nothing

3:08

really much happens in terms of Christmas trading

3:10

before Black Friday , so

3:12

that really signifies the start

3:15

of Christmas trading period . It also dovetails with all

3:17

the events and the lighting up

3:19

of retail destinations really nicely

3:21

. So consumers often use it as an opportunity

3:23

to have their first Christmas shopping trip and

3:26

go out on that Black Friday . And of course it's not a day

3:28

, it's a week or even two weeks now . So

3:30

they use that opportunity to start

3:32

their Christmas shopping .

3:34

So we kind of rolled out of November relatively

3:36

flat , then slightly disappointing

3:38

Black Friday into December

3:41

, and I think even at the time of

3:43

recording , december's weather has been quite

3:45

turbulent , been a cold , a lot of wind

3:47

, certainly a lot of rain . So

3:50

how have we fared up to kind of , I suppose

3:52

, just at the point

3:54

before Christmas .

3:56

Well , what happens after Black Friday ? Black

3:58

Friday creates this dumbbell effect in terms of shopper

4:00

behavior . So we see a big surge

4:03

in the last week of November and

4:05

then of the subsequent two weeks

4:07

we tend to see a bit of a lull where

4:09

shoppers ease off and you

4:12

don't get that uplifting activity . Normal

4:14

life resumes until very close

4:16

to Christmas and , of course , christmas this year fell

4:18

on a Monday , which meant there was an entire trading

4:21

week beforehand for shoppers

4:23

to make the most of . So that

4:25

made a surge in the last week . So

4:27

that's what we tend to get now in

4:29

terms of the shape of Christmas shopping

4:32

, and so that's exactly

4:34

what happened this year . We had that late surge

4:36

the week before . It hasn't

4:39

been amazing over the last week or so

4:41

, but

4:43

I think the week leading

4:45

up to Christmas it was about 15% up , so

4:48

it's not huge , but it

4:51

was definitely a Christmas of caution . But I think

4:53

, more importantly , the underlying

4:55

effects on what people

4:57

are buying , how they're behaving

4:59

, those sorts of things so those are

5:02

really quite telling in terms of what they're doing

5:04

in terms of Christmas .

5:06

So have you seen any trends in terms of categories

5:08

that are performing above expectation

5:10

or where we've pulled back from our spend

5:12

?

5:13

Well , it's quite interesting because we work with

5:16

Arendal . We work with a company called AL Marketing

5:18

, who are retail and destination events

5:21

management company and create events

5:23

and promotional campaigns

5:27

for shopping centres , and we carried

5:29

out a survey with AL Marketing literally

5:31

in the run up to Christmas , trying to get that

5:33

really current

5:35

view from shoppers of what they're buying

5:38

for Christmas and that

5:40

Christmas of caution Monika

5:42

really comes through in the results

5:45

. So what we found was that

5:47

40% of shoppers said they were

5:49

going to buy less tech than they did last

5:51

year , which of course , tech

5:53

products are high value and

5:56

I mean it's probably anticipated

5:59

by the fact that there hasn't been a great new release

6:01

of any tech this year , but

6:03

clearly that means that they are not

6:05

spending as much in terms of those products

6:08

. And

6:10

food spending this year

6:12

is higher . They're saying they're spending more on food

6:14

but of course they would be because inflation is higher , but

6:17

45% were saying they're buying

6:19

more food items this year . But

6:21

also I think that demonstrates the priority of consumers

6:24

around Christmas lunch and Christmas dining

6:26

and that

6:28

dovetails with another result

6:31

from the survey , which is they're saying that spending

6:33

on entertaining at home is increasing

6:35

. So they're saying they're spending more on entertaining at home , so

6:38

they're staying home , close to home , 45%

6:40

of shoppers are spending

6:42

the same amount and 30% spending more at

6:45

home , while spending

6:48

on eating out is reduced 31%

6:50

said they were spending less on eating out . So this cautionary

6:53

, modest behaviour

6:56

pattern is coming through and

6:58

the other result we saw , which was beauty

7:00

, health and beauty . We've seen throughout the year that health

7:03

and beauty has been pretty resilient

7:05

, which is fantastic for

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those retailers and

7:10

close to Christmas

7:13

, 47%

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of shoppers said they were buying the same amount of beauty

7:18

products as last year and 27% said

7:20

they were buying more , and that can almost

7:22

be regarded as a functional purchase . You know there's

7:24

that talk about the lipstick effect

7:27

of a recession , which is the

7:29

demand for an affordable treat , but you

7:31

know , much of beauty products is about replenishing

7:33

those everyday items , perhaps

7:36

high value items , that so

7:38

many of us like to use .

7:41

Yeah , and it's interesting , isn't it ? Because if

7:43

you know what you like , then it's an easy present . Clearly

7:46

, people give up other things

7:48

rather than their favourite makeup or

7:50

their favourite fragrance , so plays

7:53

into all that piece . I mean the tech thing is interesting

7:55

as well . I think you made the point . There's

7:57

not really been any innovative tech

8:00

or new tech . You know there's no new Xbox

8:02

, playstation , apple device

8:04

other than the latest iPhone , which probably

8:07

flattens the market as well .

8:09

Absolutely , yeah , absolutely . So

8:11

it's not surprising

8:13

that people are buying less tech than

8:16

last year , if there's nothing actually to entice them to

8:18

do so . And

8:20

, you know , with beauty , of course , they're

8:22

all dressed up in lovely gift boxes , so you get

8:25

what you want everywhere anyway , but you get a little bit

8:27

more at Christmas , which is quite nice . They look pretty

8:29

. So health

8:31

and beauty really has been

8:33

probably the winner .

8:36

Good . Maybe some retailers

8:38

will be pleased with that in

8:40

terms of what the winners and losers

8:42

were , and maybe some others disappointed . We've

8:45

, then , got the kind of piece we're

8:47

in at the moment , which is Boxing Day , which

8:49

is typically when the

8:52

shops are open for sales I think a lot more closed

8:54

this year , certainly some of the supermarkets were

8:57

and again a lot more of the sales start

8:59

, don't they really ? As shops close on

9:01

Christmas Eve and you can't get the stuff delivered

9:03

for Christmas Day . So that whole

9:05

world of Boxing Day sales is morphing

9:07

. Weather's not been great , so

9:09

how do you see this period between

9:11

Christmas and New Year panning out this year ?

9:14

Yes , boxing Day . I mean , what

9:16

we've seen over the last decade or so is this decline

9:19

in the influence of Boxing Day

9:21

as a retail shopping

9:23

day . I mean , I remember when I was young and I don't

9:25

you're younger than me at Simon

9:28

, but I remember the queues outside department

9:30

stores at sort of six o'clock in the morning . Well , that doesn't

9:32

happen really anymore . Last

9:34

, we get a queue outside of Selfridges in London , but

9:36

really we don't get those queues

9:38

anymore and that's

9:40

because you know we can buy online on

9:42

Christmas Eve , christmas Day , you

9:45

know , boxing Day morning Don't need to

9:47

go and queue anymore . So

9:49

if you're going to go out on Boxing Day , it's going to be more of a leisure day

9:51

. So we've seen

9:53

in most years declines in footfall

9:55

on Boxing Day . This year we actually saw

9:58

an uplift , but we're it's in the sort of recovery

10:00

from COVID . So during 2021

10:03

we saw a huge sorry

10:05

. 2021 we saw a huge decline

10:08

. 2021 to 2022

10:10

, we saw some parts sort

10:12

of bounce back . And we've seen an

10:14

increase of footfall over

10:17

on Boxing Day this year , 4%

10:19

from last year , which seems quite a

10:21

lot . But actually

10:24

it's more of a recovery from still

10:26

a recovery from pre-pandemic

10:28

levels and we're sitting below

10:30

pandemic pre-pandemic levels still . But

10:33

what was interesting about Boxing Day is this whole leisure

10:35

thing because we saw footfall

10:38

. The results came out from MRI that said

10:40

that footfall up to 12 PM was

10:42

actually just about 1% up

10:44

by 3% . By 3 o'clock

10:46

it was 2.3% up , but the

10:48

whole day it was 4% up . Well , you

10:51

can see that the weight of the footfall and

10:53

weight of activity is later in the day

10:55

, particularly post 3 PM , and that's got

10:57

to be about eating out and socialising rather

11:00

than just shopping . So that's

11:02

the leisure day . So the next three

11:04

days are normally the big key shopping

11:06

days 27 , 28 , 29 . But

11:09

of course we've got this storm garret

11:12

which has wrecked havoc across

11:14

the UK , in the impound , at least

11:16

portions of the UK , I mean . Where I

11:18

live just north of London it's windy

11:21

and rainy but it's not too bad . I

11:24

know that from where you are , simon

11:26

. Upwards it's pretty

11:28

horrendous really .

11:29

Yeah , it's been really windy and then the

11:32

reports on the tally yesterday in Scotland with the snow

11:34

and people having no electricity

11:36

, so I think the further it would be going , the worse

11:39

it's been .

11:40

Yeah , absolutely . And in Manchester they had a mini-tornado

11:42

, understand , yesterday , so we should

11:44

have taken out power . So

11:47

that's going to affect shopping activity

11:49

around Manchester area . So

11:52

it's going to be a little bit more muted and of course

11:54

people are generally fairly cautious

11:56

. They may be going out and enjoying what's

11:58

in the stores , but we shall

12:01

see whether that translates into spend when the NOS

12:03

results come out .

12:06

Yeah , so interesting times . And then there's the

12:09

air of uncertainty . I suppose we head into

12:11

2024 , there's different

12:13

reports of we're going into recession

12:16

, we're not . Interest rates are going

12:18

up , interest rates are coming down . So

12:21

the economy's still got that level

12:23

of uncertainty that we've kind of tracked through

12:25

from the summer .

12:27

Absolutely . I mean things are

12:29

moving in the right direction . Clearly

12:31

, you know inflation has come way down from its

12:33

peak , but it's still higher than , obviously

12:36

, the 2% target . And a lot

12:38

of inflation is still city and food , which , of course

12:40

you know hits households proportionally

12:43

harder for those who are

12:45

less . So

12:47

an interest rate is what's not going up ? They haven't come down

12:50

yet and we don't know whether

12:52

they will , and there's lots to talk about us . You know

12:54

the UK going to a mild recession , so it's

12:56

making people feel a little bit

12:58

nervous . And , of course , the job market

13:01

isn't so buoyant now as it was

13:03

last year . So people are tend

13:05

to be hanging on to jobs they've got rather than starting

13:07

to look around for the new roles . So

13:10

that all leads into less

13:12

shopping really , and you know shopping's

13:15

an easy thing to pull back on . You know there's no , there's

13:17

no penalty for not shopping , whereas a lot of contracts

13:20

and streaming services and other things that we

13:22

have in our household

13:24

budgets , if you , if you cut them early

13:26

, you end up paying a penalty . You don't have

13:28

to pay a penalty if you don't shop . So people

13:30

will just rail back on this discretionary interests

13:32

and discretionary stand and wait and see .

13:36

So fingers crossed , then , as we head into 2024

13:38

, that you know , those things that are in our

13:40

favour start to work for

13:43

us . I think we've got in

13:45

the next episode we'll cover that piece and get the

13:47

actual start from December , but I think

13:49

, in summary , it's been probably a more

13:51

turbulent year than than we all expected

13:53

, hasn't it ? In terms of all those economic things

13:56

that have hit us . And

13:58

from a full point of view do I watch your kind

14:00

of summary ?

14:02

Well , it's going to be fairly muted in January . Of course

14:04

it always is . You know , december to

14:07

January we'll see November to December

14:09

we'll see an uplift , undoubtedly

14:11

. We're still sitting way below pre

14:13

pandemic levels , with 20%

14:15

below pre pandemic levels

14:18

, you know , rather

14:21

than it's not really the growth

14:23

of online that's doing that , it's

14:25

the fact that that would have happened anyway

14:28

. So there is an element of online . Yes , of course

14:30

there is , because we make fewer trips through ours

14:32

than every year . You know , as

14:35

retailers become more proficient in

14:37

offering us this wonderful online world

14:39

, we browse less . But generally

14:41

it's because we've changed

14:43

our shopping habits over that period . You

14:46

know , many of us don't go out as much during

14:49

the week because we work at home , so we're not in those towns

14:51

and cities , we're not close to those shopping centres

14:53

, so we're not shopping as much . So football

14:57

will be muted in , possibly

14:59

more muted than we'd hoped in December , despite

15:02

the success of Boxing Day , which is only

15:05

one day at a quarter . And , as you said

15:07

, the weather doesn't help . I mean , we have bad weather every

15:09

year , but when you have a lot of rain

15:11

, a lot of wind , it does deter people

15:13

from going out shopping .

15:15

Well , fingers crossed . And , as

15:18

ever , the data doesn't lie , so we'll see what

15:20

it brings in for the next one . Thanks

15:22

, dye , and we'll catch up soon .

15:24

Lovely Thanks , Simon . Hope you feel better .

15:27

Cheers .