Santa’s little helpers shun shops for sofa

Retailers without a significant online offering have faced an uphill struggle so far this festive season. The two key trends visible this year in both the US and UK have been the fact that promotions are spread over a longer period than last year, and the switch to online shopping is even more pronounced.  Stores were relatively quiet on ‘Black Friday’, now deemed to be the start of the sales on both sides of the pond, while cyber traffic was up. More shoppers are increasingly choosing to shop on mobile phones too, which adds yet another dimension for retailers to consider. Alongside the consumer’s ongoing search for value, the growth of online shopping is a trend we believe will continue to grow in influence and one we think will further highlight the divergence in the sector. Online sales growth is typically less profitable for bricks and mortar retailers as it adds variable cost without diluting fixed costs. These factors underline our cautious and selective stance on the retail sector globally.

Rosie Bichard – Newton, a BNY Mellon company

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