- Insights
Boxing Day sales footfall slumps, more than 11 million people log on for deals
Boxing Day sales footfall slumps, more than 11 million people log on for deals
December 26, Boxing Day, is traditionally one of the most significant discount shopping days in the UK. Known for offering deals comparable to Black Friday, shoppers often queue outside stores before they even open.
However, this shopping trend has changed since the pandemic. According to new Boxing Day retail foot traffic data, activity levels across all UK retail destinations were down by 8.9% by 3 PM compared to 2023. High streets saw the most significant drop, with foot traffic falling by 10.9%.
MRI Software, the company responsible for gathering foot traffic data, explained that consumer priorities on Boxing Day have shifted. The day has transitioned from being a shopping event to a family-oriented holiday, with many people preferring to spend quality time with loved ones and create memories.
Jenni Matthews, Marketing and Insights Director at MRI Software, highlighted that many retailers began online sales as early as Christmas Eve. Over 11 million shoppers opted for online shopping, a 3.6% increase from last year. Additionally, major retailers like John Lewis, Marks & Spencer, Next, and Aldi chose to remain closed on Boxing Day, significantly contributing to the decline in foot traffic.
The trend toward online shopping continues to grow. MRI Software’s report revealed that 53% of shoppers purchased at least half of their “Christmas shopping list” online, a trend expected to persist through Boxing Day and New Year sales.
Despite this shift, Boxing Day spending was projected to reach £4.6 billion, with an average spend of £236 per person. Although this figure might seem substantial, analysis from Barclays Bank indicated it actually represents a 2% decrease in overall spending compared to last year.
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Number of UK retailers on brink of collapse soars by 25%
Bankruptcy analysts at Begbies Traynor report that the number of UK retailers at risk of collapse increased by 25% in the final quarter of 2024 (October to December), reaching 2,124. The rise is attributed to escalating business costs and weakening consumer confidence.
Overall, 28,747 UK retail businesses are currently facing “severe” financial distress. The general retail sector has been hit hardest, with the number of businesses in significant financial difficulty rising by 29% quarter-on-quarter, from 1,127 in Q3 to 1,457 in Q4.
Despite the quarter-on-quarter increase, the number of at-risk retailers shows a slight improvement compared to Q4 of last year, when 2,142 businesses were on the brink of collapse.
Julie Palmer, a partner at Begbies Traynor, noted that measures announced in the autumn budget—such as increased employer National Insurance contributions, higher minimum wage rates, and adjustments to capital gains tax—have begun to impact businesses. She predicts that more companies will face financial challenges in the coming year, potentially leading to a further rise in insolvency rates.
For small and medium-sized enterprises (SMEs), minimizing costs and carefully managing finances will be essential strategies to mitigate the pressures and risks stemming from changes in tax regulations.
If you are facing financial difficulties, consulting with experienced accountants and tax experts, such as those at TBA UK Accounting, can help navigate these challenges effectively.
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A quarter of council tax raised goes on staff pensions
An analysis by The Times of data from over 250 councils revealed that nearly £7 billion was allocated to Local Government Pension Scheme (LGPS) contributions in 2023, accounting for nearly a quarter of total council tax revenue. This equates to approximately £1 of every £4 in council tax being spent on pensions.
The analysis includes Birmingham City Council, which contributed £141.7 million to its pension fund despite having declared bankruptcy last year.
Of the more than 300 councils that received Freedom of Information requests, 254 responded. These councils collectively spent £5 billion on employee pensions last year, representing 23.5% of their council tax revenue. In some councils, this proportion exceeded half. Based on this data, The Times estimates that the total pension contributions across all councils surpassed £6.7 billion.
Local government employees in the UK are automatically enrolled in the LGPS, a defined benefit pension scheme that guarantees inflation-linked income for life after retirement. This makes it one of the most cost-effective pension plans in the country.
However, the high cost of maintaining defined benefit pensions has led many employers to phase them out in the private sector. Most private-sector employees now save for retirement through defined contribution schemes, where their savings are invested in stocks and bonds.
While the LGPS adds financial pressure to councils already facing fiscal challenges, a spokesperson for the Local Government Association, representing councils, noted: “Over 90% of councils are experiencing difficulties in staff recruitment and retention. Pension schemes can help encourage people to work in local government.
For council employees, whose wages are often lower than comparable private-sector roles, the pension scheme alleviates recruitment shortfalls and ensures public sector staff have secure retirement benefits.”
