20 November 2007, 15:09 PM

  • Although 2007 hasn't been the best year for UK retailers, many are expecting a Merry Christmas, according to findings revealed by the American Express 2007 Retail Monitor.

Nearly half (46%) of retailers said holiday sales this year would be better than last year – a similar level of optimism compared to 2006, whilst 52% (up 4% from 2006) think sales will be the same. Only two percent predict that holiday sales will be worse than last year.

The results are part of the second annual American Express Retail Monitor and underline the economic importance of Christmas to UK retailers, with respondents expecting the festive season to account for 26% of their annual revenues.

According to the survey, consumer sentiment appears to match retailers’ positive outlook, with 88% UK Christmas shoppers planning to spend the same or more as they did on Christmas gifts in 2006. In addition, 12% said they planned on spending less.

Overall, consumers planned to spend an average of £307 on gifts this year, while one in seven (14%) are planning to spend in excess of £500.

UK retailers cited competitive pressures (74%) as the most likely issue to affect overall revenue over the Christmas period. Other challenges identified were health of the economy (60%), and consumer confidence (56%).

In order to combat competitive pressures, UK retailers are turning towards new advertising methods, with new media (32% comprising online advertising, search engine advertising and email marketing) replacing traditional TV and magazine advertising (28% combined) as the vehicle that most UK retailers will use to steal the march on competitors.

UK retailers reported they were twice as likely to advertise online (16%) than they are on TV (8%).