Few public holidays during Christmas – how will this impact retail?

2016-12-23

The Christmas and New Year period will be an industrious one this year since there will be very few days of public holiday. Depending on how the days of public holiday in relation to Christmas and New Year happen to be placed on the calendar, December can yield from ten to fourteen days off from work. This year happens to be a year that yields the fewest days off possible – ten days. This makes it more difficult for the working population to achieve a longer cohesive period away from work since many more days of holiday leave must be used than during the more favourable years. In other words, the Christmas period this year is an “employer’s delight”.

The last time December contained so few days of public holiday was in 2011. In conjunction with the period in 2011, a survey was conducted that showed that seven out of ten Swedes worked all or some of the work days between Christmas and New Year. In theory, this should have a positive effect on sales in Swedish retail. HUI predicts that retail trade during the Christmas period, measured as the total retail trade in December, will set a new record with increased growth of 3.5 per cent or SEK 77.7 billion. Since there is less opportunity to take time off from work, fewer people will travel abroad, which means that Swedes will spend more money at stores at home. As compensation for having to work, shoppers might decide to treat themselves to an extra box of chocolate, one more sweater than intended during the After Christmas sales or a more expensive bottle of wine. Sales statistics indicate that the fewer days off we have in December, the higher the sales in retail trade. There is, however, one reservation. During the 2013 Christmas period, for example, there were many days of public holiday and thus good opportunities to take a longer cohesive holiday. Despite this, retail trade during the Christmas period that year broke the previous sales record, which means that the number of days off from work and the distribution of these days might not impact sales to the extent one might believe. Rather, it is likely that factors such as the economic situation and disposable income play a larger role.

It is interesting that the placement of Christmas Eve on a Saturday may positively impact e-commerce. A long work week in which consumers look for ways to buy some or all of their Christmas gifts without wasting time and energy in physical stores could mean an upturn for e-commerce companies that are able to communicate clearly and credibly that deliveries will arrive before it is time to sit down in front of the Christmas tree and pass out gifts.

That there are very few days of public holiday during the Christmas period has several implications for retail traders in addition to the impact on sales. Scheduling employees to work might prove to be a tricky issue. As opposed to the rest of the year, the number of shoppers to expect between Christmas and New Year is more unpredictable. It can be assumed that more people will shop during the daytime the years employees have the opportunity to be off work. This is different from the years when many people work during the days between Christmas and New Year and decide to shop at the After Christmas sales or the grocery store in the evening on their way home from work. Retail trade during the Christmas period requires a great deal of extra personnel. The Swedish Trade Federation (Svensk Handel) estimates that 16,000 people take on extra employment in retail during the Christmas period.

Fewer days off from work generally means more money for companies and for the public economy as a whole. The Swedish Trade Federation estimates that every extra day that is a work day instead of a holiday means that goods and services are produced for an additional SEK 5-10 billion. Since most employees receive a monthly salary, the fewer the days off from work, the higher the production for the same employee expense. Fewer days of public holiday in relation to Christmas and New Year also results in companies having to pay less compensation for overtime and work during inconvenient hours. For retail trade companies specifically, the hope is that increased sales in combination with lower expenses will contribute to easier survival for retail dealers that are faced with increasingly higher expenses for purchases, leases and salaries without always having the possibility to compensate for these higher expenses by charging consumers higher prices.