Did Online or High-Street Retailers Win the Christmas Battle?

Christmas is crunch time for retailers, with both online brands and high-street stores competing hard for seasonal spend. While recent years have seen eCommerce take a growing share of the market, the festive period has traditionally been a time when shoppers return to physical stores.

However, Christmas 2016 marked a clear shift. According to BDO’s High-Street Tracker, like-for-like high-street sales fell by 0.1% compared to December 2015, while online sales jumped by 19%. That said, online retail still accounted for only around 15% of total retail spend, meaning the full picture is more nuanced than the headline figures suggest.

Supermarkets Strengthen as the High Street Struggles

Britain’s major supermarkets were among the festive winners. Tesco reported sales growth of 0.7% over the Christmas period, while Sainsbury’s exceeded expectations with over £1 billion in sales, achieving a 0.1% rise against a forecasted 0.8% decline.

It wasn’t just food and drink driving performance. Retailers such as M&S, John Lewis and Debenhams also recorded stronger sales across clothing and homeware, showing that consumers were still willing to spend — just more selectively.

On the wider high street, however, results were weaker. While a 0.1% decline was an improvement on the 5.3% drop seen the previous year, any fall in sales continues to raise concern. Next was one of the hardest hit, with full-price sales down 0.4%, triggering a 12% drop in its share price.

Online Retailers Enjoy a Festive Order Boom

For many online retailers, Christmas delivered record-breaking results. ASOS reported an 18% rise in UK sales in the four months to the end of December, alongside a 52% increase in international sales. Boohoo.com also enjoyed strong growth, with UK sales up 31% and overall revenue rising by 55%.

Overall, online retail spending increased by 16% year-on-year, representing an estimated £18 billion uplift compared to the same period in 2015. Growth in smartphone shopping, combined with aggressive Black Friday and pre-Christmas promotions, played a major role in driving this surge.

Why Did Online Sales Perform So Well?

The continued rise of eCommerce reflects a broader shift in how consumers approach Christmas shopping. Key drivers include:

• Greater consumer confidence: Online shopping is now well established, with trust in payment security and delivery reliability encouraging more customers to shop digitally.

• Speed and convenience: Ordering online removes the stress of busy high streets, long queues and limited stock — a major advantage during the festive rush.

• Improved delivery and customer service: Many online retailers now work closely with reliable delivery partners to ensure orders arrive on time and in perfect condition, even during peak periods.

What This Means for the Future of Christmas Retail

The data suggests that online retail will continue to grow in importance during the festive season. While the high street still plays a role — particularly for food, gifting and experiential shopping — the balance is shifting.

For eCommerce businesses, success increasingly depends on efficient fulfilment, reliable delivery and a seamless customer experience. As expectations rise, retailers that can scale their operations during peak demand will be best placed to win future Christmas battles.