2014 was a good year for consumers, and by the end of the annual period there was even evidence that the income squeeze had come to an end as inflation dipped well below the rate of inflation. Consumer confidence was strong, helped by a rising housing market. The threat of an increase in interest rates failed to materialise. The only problem for retailers over Christmas was the baleful impact of Black Friday.

This report looks in more detail at Christmas shopping habits:

• What people spent money on.

• Where people spent their money – in-store or online.

• How shopping patterns are changing.

• How much they spent.

• How retailers performed.

• What the prospects are for 2015.

• The lessons of Christmas 2014.

Financial definitions used are:

• Sales: turnover as reported by the company, excluding VAT.

• Operating profits: pre-tax profits plus interest, less non-trading income such as the sale of fixed assets and any exceptional items, including provisions.

• Pre-tax profits: the net trading profit after deducting all operating costs including depreciation and finance charges, but before deduction of tax, dividends and other appropriations.

• Operating margin: operating profits as a percentage of sales.

• Pre-tax margin: pre-tax profits as a percentage of sales.

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