New data has highlighted the challenges facing smaller shops when it comes to competing with bigger brands for a share of this year’s Christmas wallet, with half (51%) of the UK’s independent retailers unable to match lower prices and a third (35%) unable to compete with free or low delivery costs.
A fifth (37%) of respondents revealed that rising overhead costs are also putting them at a disadvantage compared to retail chains, as the rising cost-of-living continues to hit their bottom line.
The research, which was conducted by online wholesale marketplace Faire to canvas the views of independent shop owners, found that many anticipate consumer spending to be impacted by the ongoing economic uncertainty too, with almost half (48%) expecting sales to fall this Christmas.
52% said shoppers are buying fewer Christmas gifts compared to previous years, almost a third (30%) say spending on decorations is down and 22% say spending on food is decreasing.
However, many independent retailers are rising to the challenge with clear measures in place to make the Christmas shopping season a success. With over half of respondents (58%) expecting consumers to do the bulk of their Christmas shopping online, nearly a third (31%) have opened an online shop for the first time, or put more of their products online ahead of the festive season.
A third (34%) of independent retailers are also stocking up on cheaper, more affordable gifts to help encourage purchases, and half (49%) said they will be running special Christmas offers and discounts.
Kate Tompsett, who owns independent shop Happy & Glorious in Canterbury, said: “People are buying less, but they’re also buying better; one or two beautiful gifts rather than lots of lower priced items that might not be treasured in the same way. Average spend over the last three months is actually up by 16% on last year, as a result.
“It’s very difficult as a small business to compete with big brands, but I feel that the important thing to remember is that we don’t have to be like them in order to compete. We only sell British made gifts, the vast majority of which are made by one-person businesses, so we have a wealth of gorgeous ceramics, candles, pampering products, homeware and stationery that you don’t see anywhere else.
“Coupled with our ability to pivot quickly according to design trends and buying habits, I would say whilst it’s challenging, it’s also a powerful time to run an independent shop.”
61% of the independent retailers Faire polled said they are investing in homemade, unique or locally-sourced products in a bid to stand out from the crowd while more than a quarter (27%) say they are also opening a new shop or running more in-store events to increase interactions with customers.
This includes Wilfred Emmanuel-Jones MBE, owner of The Black Farmer – an independent and artisan farm brand based in Devon and stocked and sold across the UK and online – who opened his first physical store in Brixton, London, this Christmas.
He said: “Of course you can buy things easily in a supermarket or online but independents develop a relationship with their customers that the bigger retailers just can’t compete with. The whole concept of our new bricks-and-mortar store is about bringing the farm shop experience to an urban environment.
“There are going to be more unusual products that people can discover for the first time, things like insect farms that give people a feel of the countryside, and community spaces so they can not only buy but also enjoy the store environment and even work there.”
Charlotte Broadbent, UK general manager of Faire, said: “The current economic climate means costs are rising and consumer confidence is shaky, but independent retailers are also taking the necessary steps to have as strong as festive experience as possible.
“It may seem in a squeezed retail market that smaller shops are looking at a tough Christmas, but the reality is they can get around that by being agile and taking decisions in the moment. Independent retailers are the original influencers of their communities and have personal relationships with their customers, so can curate shopping experiences specifically with their interests in mind.
“Bigger businesses have their planning for Christmas done months ahead and this means they can get stuck with decisions, or a product range which if it doesn’t shift, they are forced to discount.
“At Faire, we are committed to helping small businesses overcome the disadvantages they face when competing against much bigger retailers by helping them discover and curate unique, high-quality products that shoppers won’t be able to find online or in bigger stores.
“Because of the unique variety of products and personalised service they offer, Christmas is the most important time for independent retailers and we know that almost three quarters of consumers believe Christmas is the time when independent retailers should take centre stage. That’s why we are encouraging shoppers to support this important community by shopping locally and independently as much as possible.”
Faire, which launched in the UK in 2021 now serves over 45,000 retailers in the UK, four times the number of stores than the four largest supermarket chains combined. It provides independent retailers with flexible payment terms, and the ability to buy from thousands of independent brands and even search with the filter “Not on Amazon” to stand out amid intense high street competition.
