The festive effect

Hello and welcome to the first Nugget of 2024, where we’re taking a backward glance at spending during the festive season. Thanks to the double whammy of Black Friday and Christmas, it’s no surprise that November and December are the two most important months of the year for many retailers, contributing a substantial chunk of total annual sales.

‍How important, you might ask? In anticipation of the release of those all-important December trading updates from locally listed retailers, we looked at festive season spending trends by 22seven users over the last five years for non-grocery retailers, excluding 2020 when Covid messed things around a bit.

Let’s dive in.

When we consolidate average monthly spending over the period, it’s clear that November and December punch well above their weight. Combined, the final two months of the year contribute nearly a quarter of annual sales.

To better understand this trend, we segmented the data into various retail categories. If spending was spread equally throughout the year, each month should contribute 8.3% to annual sales, and any two-month period should account for around 16.7%. In November and December, however, most categories outperformed this benchmark. A few categories in particular – notably Footwear, Furniture & Home and Sports & Outdoor – generated 20% and more of their annual sales over the festive season.

When we look at the spending split between November and December, there’s a significant spike in December for Footwear and Sports & Outdoor. Maybe these categories aren’t as heavily influenced by Black Friday, or maybe Santa is just big on gifting shoes and camping gear?

Total spending is made up of two metrics: transaction value and number of transactions.

In November, thanks to Black Friday, our consolidated data shows an increase in the number of transactions, although the average transaction value isn’t significantly different to other months. December doesn’t show a notable increase in average transaction value either, but the average number of transactions builds on the November spike by a further 17%. (The empirical evidence as to why malls feel so busy around Christmas…)

Our estimate of December spending will be published later this week, featuring actual spending growth in various categories at different retailers over the most recent festive period. Want an early read on 2023 spending trends before the retailers release their own updates? Get in touch to find out more about the Insights dashboards and subscription plans.

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