Far from offering respite, Christmas has seen a continuation of the prevailing narrative around UK retail. The high street has struggled all year with the likes of Marks & Spencer, Next, Debenhams, House of Fraser and Topshop all reporting difficulties. A study by PwC and the Local Data Company (LDC), published in November, suggested that an average of 14 stores a day are being shut across the country. The study of 500 UK high streets found that 2,692 stores had been shut in the first six months of the year.

Perhaps more worryingly, this week online retailer ASOS issued a profit warning and joined the list of retail strugglers. This prompted a fall in retail share prices across the board. ASOS’s difficulties point to the very subdued consumer mood this Christmas. Trajectory’s Optimism Index, which accurately predicted consumer spending throughout the year, reached a score of 47 in December – the second lowest score for 2018.

It seems clear that the prolonged uncertainty around Brexit has led consumers to reign in their spending this festive season. A report by Deloitte claims that retailers had launched a record discounting spree in the run-up to Christmas, with price reductions averaging 44%. In an analysis of 800,000 products, Deloitte said it expected the price cuts to reach 48% by Christmas Eve.

However, the current muted consumer mood, and the travails of ASOS, should not mask the significant structural shift in the UK retail landscape that is seeing online take an ever-greater share of total spend. UK shoppers have embraced online retail more enthusiastically than those in any other developed country. In 2016, 17% of UK retail sales were online, compared to 15% in Germany, 14% in the US, 9% in France, a European average of 9%, 4% in Spain and 3% in Italy.

Growth in online spending, as a percentage of overall retail sales has grown steadily over the last decade and is accelerating (as seen in the chart below).

ONS data (slightly different to the international study reported above) suggests that on an overall annual basis, online accounted for 16.3 of retail sales in 2017 compared to 3.4% in 2007. However, the pattern within the year is much more pronounced with online securing an even greater share of important pre-Christmas sales, the period when retailers make most of their profits. For example, online accounted for 20% of retail sales in November 2017, a higher figure than the average for the whole year. The trend is well established. At current rates of growth online sales will account for 20% of all retail spending in 2020 and 27% of retail spending in 2025 – but the share of pre-Christmas sales could be as high as a third (33%) by 2025.

UK shoppers are more prepared to abandon their high streets than shoppers in comparable developed economies, and they are particularly prepared to abandon their high streets when it comes to Christmas shopping. There is no sign of this trend reversing, so high street retailers need to brace themselves for a greater online onslaught, even if the good times return in Christmases to come.