What Christmas Really Means for Retailers - And How We Can Support Local Shops

5th December 2025

For most retailers, Christmas is far more than a festive rush. It's the defining moment of the commercial year: a period that shapes profitability, determines cash flow, and often decides whether the business will remain viable into the following spring.

While shoppers see twinkling lights, gift boxes, and seasonal cheer, retail executives see risk, opportunity, and a race against time.

And as online shopping continues to dominate headlines, local high-street retailers are fighting an even tougher battle—not only for customers, but for survival. So what does Christmas truly mean for retailers, and how can we as consumers support the ones rooted in our communities?

Christmas - The Make-or-Break Season

A huge chunk of annual revenue lands in two months

For many retailers, 25-40% of yearly sales are made in November and December. Missing targets during this period creates a hole that the rest of the year can't fill. A poor Christmas often leads to cash-flow pressure—or even insolvency—in the early months of the next year.

Cash flow, creditors and lenders all hinge on December performance

Retailers depend on credit lines, supplier trust, and bank facilities to stock up for Christmas. Strong results calm lenders and reassure suppliers. Weak results do the opposite, often prompting suppliers to tighten payment terms, which can be devastating right when cash is most needed.

Fixed costs don't go down when sales do

Rent, staff, utilities, delivery networks, technology: these are largely fixed. Christmas is the time when high sales volumes finally cover these costs and push the business into profit. If demand falls short, the cost structure does not magically shrink to match.

Profit margins are won (or destroyed) in December

When sales lag early in the season, retailers often resort to heavy discounting. That may boost revenue, but it’s terrible for margin—and margin is what keeps the lights on.

Stock and cash are tightly linked

Christmas stock is highly seasonal, and unsold inventory in January becomes a cash sinkhole. Fashion, gifting, toys, decor and festive food all drop sharply in value after the holiday.

Q1 is historically retail’s "danger zone"

Many retail failures occur in January-March, when:

cash reserves are at their lowest,

supplier bills arrive from Christmas stock, and

consumer spending drops naturally.

That’s why Christmas matters so much—retailers need to enter the new year with cash in the bank and confidence from suppliers.

The Online vs Local Retail Battle
Are Online Prices Really Cheaper?

There’s a common assumption that online always means lower prices. But the reality is more nuanced.

Online isn’t always cheaper—here’s why

Dynamic pricing means online retailers may raise prices during demand peaks.

Shipping costs and returns (especially in fashion) add hidden spend.

Online exclusives sometimes come at premium prices.

High-end marketplaces charge fees that push prices up.

Local retailers negotiate deals with suppliers and may match or beat online prices for key seasonal items.

In many categories—books, toys, homeware, mid-market fashion—local stores often match online prices, especially during Christmas promotions.

Where online is usually cheaper

high-volume electronics

commodity household goods

some branded toys

But even here, the margin is often smaller than people think.

In other words the "online is always cheapest" myth is outdated. Many local retailers price competitively—shoppers just assume otherwise.

How Consumers Can Help Local Retailers This Christmas

Supporting local retailers doesn’t mean abandoning online altogether. It means being conscious of the value they bring—and recognising that small shifts in behaviour can make a huge difference.

Do part of your Christmas shopping locally

Even shifting 10–20% of your spend to local shops during the season can transform their trading results.

Click-and-collect locally instead of home delivery

Many independent shops now offer online ordering with local pickup—convenient, cheaper, and keeps money in your community.

Buy gift cards from local retailers

Gift cards provide immediate cash flow—exactly what retailers need to survive the post-Christmas dip.

Consider repair, refill and specialist services

Many local shops offer services online retailers can’t compete with.

expert advice

repairs and alterations

speciality products

one-to-one customer care

This support can build loyalty and sustain independent businesses.

Share your positive experiences

Word-of-mouth is powerful. A quick Google review or social post can boost foot traffic dramatically.

Don’t automatically assume online is cheaper

Check the price in-store—it often isn’t more expensive, and the service quality can be higher.

The Bigger Picture - Why Local Retail Matters

High streets aren’t just shopping districts—they’re community anchors. Local shops contribute to:

employment

social connection

safer, vibrant town centres

local investment

reduced environmental impacts

When a retailer closes, the effects ripple far beyond a locked storefront.

Christmas is the heartbeat of the retail year. For many stores—especially independents—it is the difference between resilience and insolvency. With small changes in buying habits, consumers can help ensure the shops that give our communities character and convenience survive the competitive pressure of online giants.

Supporting local doesn’t mean spending more. It simply means spending thoughtfully.