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Christmas 2012: Where the spending lies…

Franchise Direct looks at spending trends this Christmas

While few would deny that 2012 has by enlarge been a tough year for the UK economy, many businesses look to certain bumper periods for salvation, and Christmas continues to top that list. To this end, with Father Christmas less than two weeks away from cracking out the slay once more, Franchise Direct decided to investigate the key spending trends pertaining to franchising in the build-up to Christmas 2012.

The Centre for Retail Research recently laid out its forecast for household spending this Christmas, and to the relief of all retailers, predicted that Christmas spending this term would trump that of 2011 by around 1.3%. The continuing sting of austerity has seen a resuscitation of the more traditional family Christmas of yesteryear, with decorations and festivities given increased precedence.

The migration of gift retailing online is likely to accentuate this Christmas, guaranteeing a purple patch for online retailers. This could manifest in the form of increased business for franchises that specialise in selling their wares in the online space, and with a growing number of franchises realising the potential of online retailing, there is every reason to assume that they can continue to enjoy profitable Christmases for the foreseeable future. Furthermore, spending on food and drink is anticipated to increase by over £20million this holiday season. Because of this, food franchises offering Christmas-themed meals could be shrewdly poised to take advantage.

Decorations – having seen a dramatic fall last year – are set to be very much in season in 2012, and any retailer stocking them could face lucrative times in the run-up to Christmas.

Of equal intrigue is the Centre’s breakdown of where it expects gift spending to take place this holiday season. Experian Marketing Services claim in their Christmas 2012 report that of a key difference between this Christmas and its predecessor is an emphasis by the consumer on value rather than discounting. In other words, consumers are shopping around for greater value for money as opposed to simply settling for the cheapest option available.

Areas perceived to be in decline according to the Centre for Retail Research include traditional toys, clothes and footwear. By contrast, goods anticipated to sell well this Christmas include cosmetics, consumer electronics (such as gaming devices), perfume and toiletries. This spending shift could benefit a number of franchises operating in Britain such as Attirance (a manufacturer of homemade cosmetics) Xtreme Lashes (a supplier of health and beauty products) and Lacoste Boutique (featured in the FranchiseDirect Franchise Europe Top 500) among others.

We hope this Christmas is a merry one for your franchise!

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