# British shoppers defy cost-of-living crisis at Christmas Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-01-05 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Britons Top Christmas Spending Expectations: Next Reveals Meta Description: Britons spent more than expected over Christmas, helping retailers like Next beat expectations amidst a looming slowdown in consumer spending. URL: https://financedigest.com/british-shoppers-defy-cost-of-living-crisis-at-christmashtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-01-05t094948z1lynxmpej0409yrtroptp3christmas-season-britain-1736814624155-compressed.jpg) By James Davey and Sarah Young LONDON (Reuters) -Britons spent more than expected over Christmas, Next, one of the country’s biggest clothing retailers, said on Thursday in a sign that resilient shoppers helped the sector dodge a cost-of-living crisis that threatened to hit festive sales. But a slowdown looms this year, said Next warning that British shoppers were set to cut back on spending. [Britain is currently bottom among the Group of Seven major](https://www.financedigest.com/britain-delays-major-rail-project-hs2-as-costs-soar-again.html "Britain delays major rail project HS2 as costs soar again") advanced nations in terms of quarterly growth. In November, the Bank of England forecast Britain was heading into a long recession, with inflation not returning to its 2% target until early 2024, and the government’s [budget watchdog predicted the biggest squeeze on living standards since records](https://www.financedigest.com/energy-bill-support-pushes-uk-budget-deficit-to-february-record.html "Energy bill support pushes UK budget deficit to February record") began in the 1950s. In the [run-up to Christmas](https://www.financedigest.com/uks-royal-mail-workers-to-strike-in-run-up-to-christmas.html "UK’s Royal Mail workers to strike in run-up to Christmas"), however, Britons opened their wallets. Next’s [sales grew by almost 5% compared to last year](https://www.financedigest.com/spains-november-retail-sales-fall-0-6-on-year.html "Spain’s November retail sales fall 0.6% on year"), beating expectations. Discounter B&M and fast food chain Greggs also reported [higher sales](https://www.financedigest.com/renault-revenues-rise-30-in-q1-on-higher-sales-and-prices.html "Renault revenues rise 30% in Q1 on higher sales and prices"), showing the importance of value in straitened times. Health and beauty retailer Boots UK reported a [jump in December sales](https://www.financedigest.com/indias-tata-motors-jumps-to-a-7-month-high-on-strong-q4-jlr-sales.html "India’s Tata Motors jumps to a 7-month high on strong Q4 JLR sales"), highlighting strong demand in key categories such as fragrance. Next’s performance [lifted British retail stocks](https://www.financedigest.com/asian-stocks-rally-as-bank-jitters-calm-alibaba-lifts-mood.html "Asian stocks rally as bank jitters calm, Alibaba lifts mood") on hopes that Christmas, which is key to retail profit, will be better than expected across the board. Leading the charge, Next was up 8%, while Primark-owner AB Foods rose 3%, clothes and grocery chain Marks & Spencer traded up 5%. JD Sports, online fashion retailer ASOS and electrical retailer Currys were up about 3%. With 500 [stores and a big online](https://www.financedigest.com/the-benefits-of-developing-online-stores-through-shopify.html "The Benefits of Developing Online Stores Through Shopify") presence, Next is viewed as a gauge of how consumers in Britain are faring. Chief Executive Simon Wolfson said coats and [winter clothes sales](https://www.financedigest.com/uk-retailers-turn-positive-on-sales-hopes-after-bleak-winter.html "UK retailers turn positive on sales hopes after bleak winter") benefited from cold weather in December. We thought [December would be particularly difficult and it’s turned out to be much better than expected,”](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December") he told Reuters. HUNT FOR SAVINGS [Shops at the value end](https://www.financedigest.com/some-in-shanghai-allowed-out-to-shop-end-of-covid-lockdown-in-sight.html "Some in Shanghai allowed out to shop; end of COVID lockdown in sight") of the scale did even better than Next. B&M, which sells products ranging from toys to frozen goods and garden furniture, [posted a 6% rise in comparable Christmas sales](https://www.financedigest.com/uks-wetherspoon-posts-13-1-rise-in-sales-for-25-wk-period.html "UK’s Wetherspoon posts 13.1% rise in sales for 25-wk period"), and Greggs whose snacks and coffees are cheaper than many rival cafes, said its sales were up 18% in the period. On Tuesday the [British arm](https://www.financedigest.com/hsbc-acquires-british-arm-of-stricken-silicon-valley-bank.html "HSBC acquires British arm of stricken Silicon Valley Bank") of German discount supermarket group Aldi said its December sales rose 26% compared to the previous year, another sign of the hunt for savings from cash-strapped shoppers. Grocery industry data from market researcher Kantar on Wednesday showed [record Christmas sales – albeit driven by food inflation](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc-2.html "UK shop price inflation hits record 8% in January: BRC") of 14.4%. Retail sales also benefited from busier town centres, shopping malls and retail parks, both before and after Christmas as Britons returned to stores after the previous two [years when festive shopping habits](https://www.financedigest.com/100-years-of-uk-holidaying-habits.html "100 YEARS OF UK HOLIDAYING HABITS") were curtailed by the COVID-19 pandemic. Shopper numbers across Britain in [December rose 5.8%](https://www.financedigest.com/spains-12-month-inflation-slows-down-again-in-december-to-5-8.html "Spain’s 12-month inflation slows down again in December to 5.8%") from November and were up 9.9% compared to 2021, research company Springboard said. However, shoppers’ resilience will not [last into this year](https://www.financedigest.com/over-50-of-businesses-increased-their-cyber-security-budget-last-year-amid-attacks.html "Over 50% of businesses increased their cyber security budget last year amid attacks"), according to Next. Mid-market retailers, such as Next, are likely to be squeezed particularly going forward, as value end and luxury goods seem to be holding up. Next expects sales to fall by 2% in 2023, as Britons start to react to rising mortgage costs, with more [people coming to the end](https://www.financedigest.com/5-common-ways-people-end-up-in-debt-without-realising.html "5 Common Ways People End Up In Debt Without Realising") of fixed-price deals, and as higher energy prices increase pressure on household budgets. After a [year marked by the return of double-digit inflation – currently standing at 10.7% – the group said it expected its cost inflation to peak in the Spring/Summer season and fall to no more than 6% in the second](https://www.financedigest.com/ericssons-board-rebuked-by-shareholders-at-agm-for-second-year-in-a-row.html "Ericsson’s board rebuked by shareholders at AGM for second year in a row") half. A fuller picture of [Christmas sales](https://www.financedigest.com/inflation-drives-britains-record-christmas-grocery-sales.html "Inflation drives Britain’s record Christmas grocery sales") will emerge next week when Tesco, Sainsbury’s, M&S, JD Sports Fashion and ASOS all update on trading. (Reporting by Sarah Young, James Davey and Paul Sandle, writing by Sarah Young; Editing by Emelia Sithole-Matarise) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---