This week we passed the psychological barrier that every retailer feels deep in their business brains, 100 days to Christmas!! We see news stories of Brown Thomas setting up their Christmas shop and decorations going up in other big multiples around the country. Most people scoff at such blatant commercialism, myself included. But here's the thing, Christmas is, from a retail perspective, the most important time of the year. We spend a lot of time and money getting our shops and offerings ready for the biggest annual shopping spree. For many businesses, the Christmas period ( roughly two months from mid November to early January) represents 25% to 30% of annual turnover, for some it can get as high as 60% or 70%! It's like finding an oasis in the middle of the desert for these businesses, life sustaining.
In just over three months, businesses will know if they can rest easy for another year or if they face the desolate plains of oblivion. Without big enough sales receipts over the holiday season, many business models will collapse and companies will be forced to close. We already see this happening in the hospitality sector. How many of our favourite pubs and restaurants will open their doors in 2021?
In normal times, you can almost guarantee that Christmas will be "good" in terms of revenue. The solid foundation of human emotion and family connection that retail has built its stall on has been proven year after year for decades. People like to buy stuff at Christmas, presents for family and friends, toys for kids, treats for themselves and food for all. It's why this time of year has become so important, and if something is almost guaranteed to happen every year, humans have an uncanny knack of making money out of it. But in those famous words, "you have to speculate to accumulate". The form of speculation in this case is the outlay on stock, staff, decorations, marketing and myriad other expenses necessary to compete in the commercial world. This year, the outlay has a lot more risk attached.
"In normal times" is a phrase that has become part of the lexicon over the last few months. How much were "normal times" taken for granted? The prospect of a "Covid" Christmas will shed light on this. Will those overseas be able to return home? Will families be able to visit each other? What about calling into the neighbours? Christmas parties? St Stephen's night drinks? The 12 pubs? Christmas concerts? Midnight Mass? All of these things have to be called into question right now.
This leads to the prospect of commercial activity being severely reduced this Christmas. The desolate plains of oblivion may become a common sight for many of the retailers and business people of this Island. The lockdown in Spring came as a massive shock. There was no warning and no time to plan. Lockdown is not a part of normal business model or even in the thought process of most people in general. From a business perspective, it was a huge cost, both in terms of normal business expenses and lost revenue. Then there is a social cost which also has a knock on affect on business.
It all adds up to a very precarious position. Will the annual splurge happen this year? Will people feel confident enough to come out and spend? Will we have a "normal" (to the extent it can be) Christmas? Who knows?
One way to try and offset the ambiguity is to try and adjust spending patterns. Stretch it out over the next three months rather than the normal concentration of activity in the last few weeks before the big day. Start earlier, get things done and avoid the need for the last minute rush, "flatten the curve" if you will?
So when you see the stories of Christmas decorations going up earlier than usual this year, realise that there is method to the madness. It might just keep businesses open next year.