Britain’s Christmas Spending Binge Leaves U.S. Trailing

After the flood of Black Friday advertisements and mailings, it may be hard for Americans to imagine that there’s a place on earth where the Christmas season matters more to retailers than the U.S. There is: Britain.

Britons do a larger proportion of their annual spending in November and December than Americans, so those months are even more crucial for retailers such as Marks & Spencer Group Plc and Next Plc than for the likes of Saks Inc. and Macy’s Inc.

Christmas in the U.K. is celebrated “more enthusiastically than anywhere else,” Marc Bolland, the chief executive officer of M&S, said at a Nov. 5 press briefing.

Five years of economic hardship have accentuated the U.K.’s Christmas spending peak, encouraging shoppers to save for their big end-of-year celebrations, according to Ian Geddes, U.K. head of retail at consultants Deloitte LLP.

“If households haven’t got the money, they’ll tighten the belt all year,” Geddes said. “The one time they will make a big splash is Christmas.”

U.K. retail sales in November 2012 were 15 percent above the average for the first 10 months of the year and 37 percent above the average in December, government statistics show. In the U.S., November retail sales were 11 percent above the 10-month average and for December the increase was 31 percent.

The holiday season is also the busiest time of year for U.K. drinking establishments. As Britons spend the long nights reveling with friends, colleagues and families, sales at pubs and restaurants in December surge to about 20 percent above the monthly average, according to researcher CGA Peach.

Valentine’s Day

One in five customers at the Asda supermarket chain will start saving for Christmas in January, the grocer estimates. Such attitudes have spurred stores to stake their claims ever earlier. Asda, owned by Wal-Mart Stores Inc., opened its reservation lines for Christmas deliveries on Nov. 21, two weeks earlier than in 2012. By that time, M&S and John Lewis Partnership Plc had already been running lavish television ad campaigns promoting the season for almost three weeks.

“It starts so early that when Christmas Day finally arrives, I’m tired of it,” said Claire Landon, a 37-year-old New Yorker who has lived in London since 2000.

Americans tend to spread their spending more evenly through the year, due partly to retailers offering promotions to encourage spending on occasions such as Valentine’s Day, Mother’s Day, and back-to-school in September, said Chris Donnelly, a Chicago native who has lived in the U.K. for two years and is global managing director of the retail practice at consultant Accenture Plc.

German Markets

And then there’s Thanksgiving, which Donnelly says is primary reason for the trans-Atlantic disparity. The holiday, always on the fourth Thursday in November, “acts as a firewall in terms of Christmas promotions and Christmas spending in the U.S.,” Donnelly said.

While the U.S. has a relatively short Christmas shopping season this year, with Thanksgiving falling on Nov. 28, Britain’s countdown to Christmas started earlier than ever. The holiday lights on London’s Regent Street were switched on Nov. 9, four days sooner than last year, while pubs and restaurants were urging households and companies to book Christmas parties in July.

Festive bazaars modeled after Germany’s holiday markets opened in mid-November in London, Birmingham, Manchester and Leeds, two weeks earlier than most similar fairs in Berlin and Frankfurt.

Consumer Orgy

So by the time the U.S. holiday shopping season officially got underway with the barrage of Black Friday discounts on the day after Thanksgiving, U.K. retailers had already been wooing Christmas shoppers for weeks.

TV ad spending is up 7 percent in November and December from the same period a year ago, led by retailers, according to media agency The 7 Stars.

John Lewis, the largest U.K. department-store chain, has earmarked more than 7 million pounds ($11.3 million) for a six-week campaign, the centerpiece of which is a two-minute animated ad featuring a bear and a hare.

Marks & Spencer’s holiday commercial, a fantasy production featuring model Rosie Huntington-Whiteley and Academy Award nominee Helena Bonham Carter, made its television debut on Nov. 6, a day earlier than last year’s campaign. The retailer is seeking to reverse nine straight quarters of declining same-store sales in its general-merchandise unit. The shares fell 1.7 percent to 471.9 pence at 2:59 p.m. in London.

U.K. retail sales in December will rise 3.5 percent from a year earlier to 40.3 billion pounds, Deloitte estimates. In the U.S., sales in November and December will increase 3.9 percent to $602 billion, the National Retail Federation predicts.

“Unlike the U.S. we don’t have the other holidays in the second half of the year,” said Bryan Roberts, an analyst at researcher Kantar Retail in London. “So Christmas is a full-on consumer orgy -- with the predictable retail hangover early in the New Year.”

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