Retailing in the Week Ahead, Week 3, 2019

January 14 is New Year’s Day for those who follow the Julian calendar. So, if I did not get a chance to wish you a Happy Gregorian New Year, please accept my Happy Julian New Year wishes.

British retailers have a tradition of reporting their ‘Christmas Trading’ results starting around the 5 January and rolling into Week 3. Approximately 45 retailers report these numbers to investors. Some do it in fine detail while others say very little. We at Kantar track these figures for many reasons, but the main reason is so we can tell you stories, Dear Reader. I call this holiday trading because many retailers talk about 9, 10, 11, 12, or 13 weeks of trading so these numbers include holidays such as Diwali, Halloween and so on. One retailer even reported “11 months” this year.

This year, a very interesting story is emerging which warrants deeper investigation. You need not worry, we are already investigating. I say ‘we’ as in Kantar, but the reality is we are collaborating with The Grocer magazine and The Grocer will very likely have some good information on this topic in upcoming issues. So, if you have not visited their website recently and you find this topic interesting, there has never been a better time than Week 3*.

The story that is emerging is what we are tentatively calling the Online Holiday Paradox. We call it online because we are only seeing the split in consumer behaviour when it comes to buying goods on the Internet. We call it Holiday because it appears to only happen during the few weeks preceding the Christmas and Boxing Day big event. We call it a Paradox because the split happens in two types of consumers: Consumer Type 1 is someone who regularly shops the Internet, all year long; Consumer Type 2 is someone who barely ever shops the Internet during the 11 months prior to December.

Seasonal shopping trends appear to be changing as shopper distinction between online and offline becomes blurred. (Source: Tesco/Next)

So, what is happening? Early data suggests that regular/routine online shoppers, particularly those that buy groceries online, suddenly stop behaving in a routine manner; they stop buying online and the miraculously start going back to real physical stores. The opposite phenomenon is true in the case of regular/routine bricks-and-mortar shoppers. They also stop behaving in a routine manner and go bananas buying promotions for Black Friday (Let’s be honest, we should all start calling it the two weeks of non-food promotions at the end of November.).

How big a difference are we talking about? Quite big, if the numbers are to be trusted.

We have retailers such as Tesco, who abandoned non-food on 7 July by closing down Tesco Direct. They reported online like-for-like sales growth of 2.6% (Like for like = just the grocery piece) – so, in total, online sales for Tesco were negative this year as a result of their strategic decision to exit non-food. Meanwhile, non-food retailers such as Ted Baker, John Lewis & Partners, Moss Bros, Ryman, Next, Marks & Spencer, Card Factory, and Hobby Craft all reported online sales growth exceeding 14% and sometimes approaching 60%.

Several caveats need to be put forward about these numbers before we make big conclusions. First, many of these retailers are growing from a very small base whereas Tesco, and other grocers, have developed big businesses over many years. Second, as previously mentioned, no two retailers measure these numbers in the same way, including the same time periods. Third, it is impossible to get a read on these figures when it comes to individual consumer types – so some of our ‘conclusions’ are more hypothesis-based than actual fact.

However, we have access to confidential data that cannot be shared with a wide audience which would indicate that this story is more than just hypothesis. Therefore, we encourage you, Dear Reader, to dig into your own data, beginning with Halloween, and try to analyse how ‘Online’ consumers are purchasing your own categories differently during this year’s festive period. We have a strong suspicion that consumers have not been buying in the ways you think they do. We think that the Online UK Holiday paradox is real and may be something to begin thinking about in the context of 2019 holiday planning.

With that, as always, we encourage you to click on links to some other great pieces of work we published on Retail IQ in Week 2:

In addition, if you get a chance, please share your thoughts or questions on ‘Online Paradox’, or any other topic. Good luck in the week year ahead.


Ray Gaul – and @KantarConsulting or @RayGaul on Twitter plus LinkedIn.

*Disclaimer - Please note, Kantar has not been compensated in any way to make statement about The Grocer and we have no inputs into their commercial and marketing policies. We simply know that they are investigating this story and making some progress on the topic.

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