High street retail back in fashion this Christmas despite forecasted drop in spending

Research by digital identity specialists, ID Crypt Global, has revealed that while the cost of living crisis is expected to dampen the total spend seen across the retail sector this holiday season, the nation’s high streets are back in fashion and forecast to bear the brunt to a far lesser extent than their online equivalents.

The research shows that the total retail spend has increased notably during the pandemic, up 7% from £393.7bn in 2019 to £421.3bn in 2021.

In-store purchases accounted for 69% of the total £421.3bn retail spend in 2021, with online shopping accounting for the additional 31%.

But, while the majority of us still opt to head to the high street, the proportion of in-store purchases has declined steadily during the pandemic, down to the 60% seen in 2021 from 81% of the total retail spend seen in 2019.

So while the retail sector has benefited from an increased level of spend, more and more of us are choosing to do our shopping online.

The good news is that Christmas should bring a welcome boost to high street retailers, as the analysis by ID Crypt Global shows that in 2021, the total spend seen during the Christmas season accounted for a fifth of the entire yearly total.

The level of Christmas spend attributed to in-store purchases accounted for 18% of all in-store retail in 2021, while online Christmas sales made up a quarter of all online sales seen during the year.

However, in-store purchases during the festive season accounted for 62% of total Christmas retail spend. This proportion is up on the 56% dip seen during the pandemic in 2020 but yet to return to the pre-pandemic peak of 2019 when physical purchases during the Christmas period made up 73% of all retail sales during the festive season.

At the same time, the proportion of Christmas spend attributed to online retail fell to 38% in 2021 after peaking at 44% during the first year of the pandemic (2020).

2022 is forecast to be bitter sweet for the nation’s retail sector, with the cost of living crisis expected to dampen both online and in-store retail spend levels. The good news is that in-store purchases are only forecast to fall by -0.5% this Christmas, while online sales are expected to drop by -6.9%.

At the same time, in-store purchases are forecast to account for 63% of total retail spend, a marginal but positive improvement on the 62% seen in 2021.

CEO and Founder of ID Crypt Global, Lauren Wilson-Smith, commented:

“It’s been an incredibly tough run for the nation’s physical retail outlets who have suffered through an extremely difficult few years due to the pandemic, particularly the muted level of Christmas activity that came due to lockdown restrictions.

Just when they thought they could see light at the end of the tunnel, they look set to suffer from another quieter Christmas, with many households reigning in their festive spend due to the cost of living crisis.

However, there are some positives to take. While the online space continues to gain ground in terms of the overall annual split in retail spend, consumers continue to opt for the high street to a far greater extent during the Christmas period.

And while the cost of living crisis is forecast to reduce the sums we choose to spend this Christmas, this will have a far greater impact on the online sector, with in-store shopping seeing a very marginal decline.”