The post-Christmas slump: what to do in January when trade goes quiet

In mid-December you can barely keep up: there's a queue at the counter, you refill the chiller twice a day, and in the evening you wonder when you'll finally get to sit down. Then the second week of January arrives. At ten in the morning the shop is empty, half the bread is left over, and the daily summary shows a figure that makes your stomach tighten.

At times like this it's easy to think you're doing something wrong. You aren't: the post-Christmas slump turns up in almost every shop, year after year, at roughly the same time. The question isn't whether it will come, but how big it will be and what you do with it. If you know the answer in advance, January isn't frightening but predictable — and it can even be useful.

In this article we go through why turnover drops, how to measure it from last year's figures, how big a gap to plan for, what to do with leftover festive stock, what sells in January, where you can save costs and time, and what to use the quiet weeks for. At the end there's a checklist broken down by week and the most common mistakes. Preparing before the holidays is covered in the article Getting ready for the year end: a season plan for your shop from October to January — this one picks up where that one ends.

Why does trade go quiet in January?

The January quiet doesn't come from a single cause, but from several small ones acting at once. It's worth knowing how much each one weighs in your shop, because each calls for a different response.

• Money already spent. In December families spent more than usual, and many are waiting for their next income until mid-January. The basket gets smaller: customers buy what they need and skip the extras.
• Resolutions and diets. After the festive eating and drinking, many buy fewer sweets, snacks and less alcohol, and more vegetables, fruit, yoghurt and water.
• Staying at home. Some of the short daily trips disappear: people on holiday don't shop on the way to work, and people who are saving shop less often, with a bigger basket, at the big store.
• Weather. Cold, darkness, slush or snow keep more people indoors, and those who do go out don't pop into the corner shop ‘just because’.
• December's shadow. After December's spike every normal month looks weak. If you measure January against December, you see a dip twice as big as it really is.

How big is the dip? Look at last January

The best estimate of how big this year's dip will be is last January. Compare it with three periods: with December, because that's what you feel the quiet against; with an average month, October for example, because that shows you the real dip; and, if you have it, with the January before last, because that shows whether the dip is growing or shrinking.

Let's look at an example, in neutral units. A small shop takes 1,500 units a day in an average month, 2,100 in December and 1,200 in January. In the example we count 30 trading days in each of the three months, an average margin of 25 per cent and fixed costs of 10,000 units a month: this covers the rent, the utilities, the wages and the other regular items.

The most important figure isn't the 43 but the 20 per cent. Measured against December it always ends in panic, but measured against an average month you can see the shop hasn't collapsed, it has just gone back to a level slightly below normal. The loss isn't caused by January's turnover on its own, but by the fixed costs staying the same. That's the point you can work on.

Where does trade drop? The hourly breakdown

The daily total only tells you how much lower turnover is, not when. If you look at last January in an hourly breakdown, it turns out the dip isn't even: some hours barely change, others empty out. It's worth fitting the rota and the opening hours to this, not to the daily average.

Two things follow from the example. First: the early-morning and late-afternoon slots bring in most of January's turnover, so don't cut back on service there, because that's where your regulars are. Second: the late morning and early afternoon are quiet, and there it may be unnecessary to have two people behind the counter. The evening slot is weaker too, but that doesn't yet mean you have to close earlier — more on that in the section on costs.

The January gap and the money

The example shop ends January with a loss of 1,000 units. That in itself isn't a problem if you expected it and have something to pay it from. The problem comes if you spend December's takings in December, and in January the fixed costs and the bills for December's stock arrive at the same time. Profit and cash don't move on the same timetable: how to plan the reserve, and why even a profitable shop's till can be empty, is covered in the article The shop is profitable and still has no money — stock and cash flow. Here it's enough to say: put the January reserve aside in December, out of December's turnover, before you spend it.

Part of the gap can be filled, though, and not by discounting but from the data. In the example, three simple steps:

• Less overlap. In an average month two people work at the same time for 4 hours a day, between 10 and 12 in the morning and between 15 and 17 in the afternoon. In January the two morning hours of overlap can go, because the 9–12 slot is 27 per cent weaker. At a wage cost of 8 units an hour, that's 2 × 8 × 30 = 480 units.
• The January basket. A few well-chosen January products and one or two small promotions bring in 60 units of extra turnover a day. As the promotion means a smaller margin, at 20 per cent this is 60 × 30 × 0.20 = 360 units of profit.
• One chiller fewer. The seasonal drinks chiller switched on for December isn't needed in January. If it uses 3 units of electricity a day, switching it off saves 3 × 30 = 90 units.

Together the three steps come to 480 + 360 + 90 = 930 units. January then ends at −70 units instead of −1,000: it won't become a good month, but the gap almost disappears. You can rarely get more than that out of January, and you don't need to. The aim is for the shop to reach February intact, with a reserve and a clearer head.

„January isn't there to be won, but to be got through wisely — so that in February a better shop opens its doors than the one that closed them in December.”

Leftover festive stock: selling off, waste, putting away

On 2 January festive stock loses its value from one day to the next. Gift-boxed sweets, chocolate in Christmas packaging and festive drinks still go as presents on 27 December; by mid-January nobody wants them. So you have to decide quickly about what's left: the longer it sits, the less it brings in.

Let's look at an example. There are 40 boxes of festive sweets left on the shelf, costing 3 units a box and selling at 5 units. If you leave them alone, you might sell 10 boxes at full price in January, and the other 30 go out of date. But if on 2 January you start a one-week markdown of 30 per cent, and in the second week go to 50 per cent, the result is quite different:

When you mark down matters more than by how much. The first week is the most valuable, because the festive mood is still there, and many people are still looking for something for a January get-together or for work. If you set the markdown in advance, with dates, you don't have to remember it every morning, and you won't end up with a promotion sign on the shelf while the till rings up the old price. Setting up timed promotions, and choosing between a fixed price and a percentage, is covered in the article Timed promotions: let the till ring the right price.

• What to sell off with a promotion: gift-boxed sweets, chocolate in festive packaging, festive drinks, gift hampers. Clear them in the first two weeks of January; after that they barely move.
• What to write off as waste: festive cakes that are out of date or about to be, opened or damaged gift boxes, perishable seasonal goods. Record them with a reason — out of date, damaged, unsaleable — so next year you can see what you over-ordered.
• What you can put away for next year: decorations, window displays, Christmas-pattern napkins, seasonal baskets, empty gift boxes. Pack them in a labelled box and write on it what's inside and how many.
• What to watch because of dates: some durable festive stock also goes out of date within a few months. Check the dates before you decide whether it can be put away — whatever you won't be able to sell in spring anyway, mark down now.

What sells in January?

January customers don't want less, they want something different. The December shelf, set out for presents and the festive table, keeps the right goods in the wrong places in January. If you fit the shelves to the January basket, customers search less and find more.

• Staples. Bread, milk, eggs, flour, oil, rice, pasta — January customers buy what they need, so these should always be there, clearly visible. If they're out of stock, customers shop elsewhere, and stay there.
• Healthy and diet products. Yoghurt, vegetables, fruit, mineral water, wholemeal bakery goods, muesli, sugar-free drinks. Resolutions are strongest in the first two weeks of January.
• Hot drinks. Tea, coffee, cocoa, hot chocolate powder, lemons, honey. On cold mornings these are permanent fixtures in the basket.
• Soup ingredients. Root vegetables, onions, potatoes, dried pulses, stock cubes, soup pasta. A small ‘soup corner’ at the end of a shelf sells more than having them scattered around the shop.
• Small treats. A better chocolate bar, a slice of cake, a special tea — January customers won't spend on big things, but they allow themselves a small reward. These work best next to the counter.

Refresh the window as well as the shelves. A Christmas decoration still up on 2 January says the shop hasn't woken up yet. A clean, simple winter window with hot drinks or soup ingredients tells passers-by that what they need is here now too. For ideas, see the article Shop window and storefront: ideas that make passers-by actually step inside.

Costs and time: opening hours, rota, energy, orders

In January there's little you can do about turnover, and much more about costs and time. The question is always the same: which hour, which person, which chiller and which order earns its cost back from January's turnover.

• Opening hours. Don't close earlier without thinking. In the example the 18–20 slot brings in 150 units a day; if the last hour accounts for 60 units of that, at a 25 per cent margin that's 15 units of profit, while the wage and energy cost of the hour is 8 + 2 = 10 units. That hour is still worth it even in January. Where an hour's profit falls below its cost, that's where it's worth thinking. The marginal hour is covered in the article How late should your shop stay open? The marginal hour, Sundays and early starts.
• Rota. Don't cut the opening hours, cut the overlap. Where one person is enough in January, the second should rather be in the stockroom, at the shelves or in training, or take their holiday in these weeks.
• Holidays. January is the best time for holidays: after the December peak the team wants a rest too, and the shop can cope with fewer people. If you plan holidays for January, the team will be complete in the busy months.
• Energy. Switch off the seasonal chiller, check the chillers' doors and seals, and any lighting that was only needed in December. How much each chiller costs is covered in the article What does the chiller cost you? The energy bill in a shop.
• Ordering in smaller quantities. In January, ordering by December's habits is the fastest route to overstock. Order less often or in smaller quantities, measured against last January's turnover, and for fresh goods keep track daily of what's left over.

Making the most of the quiet weeks

For the rest of the year the urgent things always win: the customer, the delivery, the queue. In January there's finally time for what's important but never urgent. If you do these things now, the whole year will be easier. It's worth writing a list and giving each quiet morning one task.

• Cleaning and tidying. The chillers, the corners behind the shelves, the stockroom, the underside of the counter — whatever you had no time to clean in December, you can sort out now.
• Reorganising. If you've long been planning to move a shelf or change the order in the chiller, now you'll disturb fewer customers doing it, and you have time to try it out.
• Stocktake and stockroom order. If the year-end stocktake is still to do, it's easier on the quiet days. The steps are covered in the article The year-end stocktake in a shop, step by step — with a checklist.
• Training. A new shop assistant learns best in January: there's time to show them the ordering, the closing routine, the chiller checks, and customers are more patient when there are few of them.
• Talking to suppliers. January is quiet for suppliers too, so it's easier to talk about payment terms, minimum orders and this year's conditions.
• Reviewing prices. Check which products' margin has slipped during the year because the cost price rose and the selling price didn't. If you need to raise prices, when and how to do it is covered in the article When and how to raise prices without losing customers.
• Analysing last year and this year's plan. Look by category at what brought in turnover and profit and what didn't, and what you'd do differently this year. For a simple annual plan, a good starting point is the article A business plan for opening a shop: template, worked example and the numbers that sink it — the logic of the figures is the same for a shop that's already running.

January promotion ideas that don't burn money

In January a promotion isn't there to bring back December's turnover, because it won't. It's there to get customers through the door, to put one or two extra items in their basket, and to make regulars feel it's worth coming here. A good January promotion is small, targeted, and you know in advance when it ends.

The biggest danger with January promotions is marking down the whole shelf because the quiet weighs on you. Then the same customers buy the same things, just cheaper, and the gap gets bigger. A promotion is good if it sells something the customer wouldn't otherwise have bought, or clears something off the shelf that would otherwise become waste.

January is the month of the regulars. Whoever still comes in at this time of year is the backbone of the shop, and they're the ones who'll keep coming in February and March. A greeting by name, a roll put aside, a question about how their holidays went are worth more than any percentage. How to get customers to come back is covered in the article Regulars: how to make people come back. And if the January mood can be felt on the other side of the counter too, with more impatient, grumpy customers, the article Difficult customers in a small shop: 10 types every shop assistant knows — and how to handle them has phrases that work.

A checklist broken down by week

January isn't planned in January, but in the last week of December, while there's still money in the till and time to decide. The list below breaks the tasks down by week, from the end of December to early February.

1. 11. Last week of December: planLook at last January compared with December and with an average month, in an hourly breakdown too. Put the January reserve aside from December's turnover, and size the January order to last January, not to December.
2. 22. 2–8 January: clear away the festive seasonStart the first markdown of the festive leftovers, take down the Christmas decorations, and rearrange the window and the shelves for the January basket. Switch off the seasonal chiller, and check the dates on the leftover stock.
3. 33. 9–15 January: close out the leftoversMove to the second, bigger markdown, and whatever is still left at the end of the week, record as waste, with a reason. Pack the durable decorations away, labelled, for next year, and note down what you over-ordered.
4. 44. 16–25 January: use the quietThese are the weakest weeks: this is the time for holidays, the big clean, reorganising and training. Talk to your suppliers, and review your prices and margins.
5. 55. End of January: look at the figuresCompare this January with last: did the dip get smaller or bigger, which hour and which category behaved differently. Draw up a simple plan for this year from last year's lessons.
6. 66. Early February: get back to normalPut the rota back to normal trading, adjust the orders to what you learnt in January, and plan the next season. Write down what you'd do differently next January, and put it with your December tasks.

Common mistakes

• Panic discounting. If you mark everything down because of the quiet, the same customers buy the same things more cheaply, and the gap gets bigger. A promotion should be small, targeted, and have an end.
• Ordering too much. After December's turnover it's easy to order December's quantities. Size the January order to last January, and rather order too little twice than too much once.
• Keeping every hour open with two people. The daily total is misleading: the hourly breakdown shows where the overlap is unnecessary. Don't cut the opening hours first, cut the unnecessary overlap.
• No cash reserve. If you spend December's takings in December, in January the fixed costs and December's bills arrive at the same time. Put the reserve aside in December.
• Measuring against December. Measure January against an average month, not against December. In the example that's the difference between 20 and 43 per cent — in other words, between a calm decision and panic.
• Putting off the leftover festive stock. Every day the gift-boxed sweets sit at full price lowers the chance that they'll sell at all. Decide about them on 2 January.
• Wasting the quiet weeks. If you spend the January hours behind the counter looking at your phone, the big clean, the training and the plan slip by another year.

In summary

• The post-Christmas slump turns up in almost every shop: money already spent, resolutions, staying at home and bad weather cause it together.
• Measure it from last January, against an average month and against December, in an hourly breakdown; in the example daily turnover is 1,200 units instead of 1,500, a 20 per cent dip.
• With the same fixed costs, the example shop ends January with a loss of 1,000 units; put the reserve aside in December.
• Cutting the overlap, the January basket and switching off one chiller win back 480 + 360 + 90 = 930 units in the example.
• Sell off leftover festive stock within two weeks with a two-stage, timed markdown; whatever remains is waste with a reason, and put the decorations away, labelled.
• In January staples, diet products, hot drinks, soup ingredients and small treats sell — arrange the shelves and the window around them.
• Use the quiet weeks for cleaning, reorganising, training, talking to suppliers, reviewing prices and this year's plan.

Frequently asked questions