It was forecasted to be a grim Christmas for retailers across the UK in the 2017 Holiday season with inflation and wage growth placing downward pressure on consumers’ holiday spending. But while investors were bracing themselves for lackluster sales over the holiday shopping season, it turns out the reality wasn’t as gloomy as was feared.                                       

Most notably, the British clothing chain Next – the first major British retailer to provide any update on holiday sales – reported that Christmas sales that were better than expected. The retailer reported full price sales growth of 1.5 percent in the 54 days before Christmas. While the retailer reported that in-store sales did fall from 2016 sales, growth in online sales more than compensated for the dip in revenue.

And Next isn’t the only British retailer to perform better than expected over the holidays. John Lewis, for example, reported an incredibly strong sales week in the final run-up to Christmas, with total sales increasing almost 9 percent. Sales at Macy’s stores also rose by 1 percent across the UK in November and December. JC Penny also reported sales growth with revenue rising 3.4 percent in the nine-week period prior to Christmas. Much of this sales growth reportedly came in the categories of home, jewelry, and beauty.

“We have long believed that conditions were not as bad as many believed for the consumer and we expect the next few weeks’ statements to show that companies with the right offer can do very well,” analysts at Peel Hunt told the Daily Mail.

The bottom line? There is no doubt that retail stores in the UK will continue to face challenges, particularly given the rough economic conditions and the ever-increasing growth of online sales. However, the situation might not be as bad as it initially seemed. Encouraging holiday sales suggests that customers are still willing to venture out to get their shopping done.

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