More than three-quarters of us are planning to spend at least as much this Christmas as we did last year, according to a new report from Deloitte. 57% of consumers are apparently planning to match last year’s outlay, while a bullish 19% are planning to splash out even more on their novelty reindeer horns and stuffing balls. However, overall spending is expected to fall - and although retailers have reasons to be hopeful, things aren’t looking so good for the beleaguered leisure industry…
Deloitte’s study found that the average UK consumer is planning to spend £655 on gifts, socialising and food and drink this Christmas, a 7% drop from last year (and the first drop for five years). However, Deloitte reckons it’s not all doom and gloom. ‘We think the talk of Christmas being cancelled is overplayed,’ says head of retail Tarlok Teji. ‘Whilst total planned spend including socialising may be down, the majority of consumers intend to spend the same as last year’. It’s predicting that retail sales will be ‘broadly flat… with a slight fall possible’. Not great, but not quite the Armageddon some have been predicting.
Of course some retailers will do better than others. For instance, Deloitte reports that the proportion of people planning to do their Christmas shopping in supermarkets has jumped from 52% to 66%, with respondents citing the added convenience and value they offer. But that could be bad news for other general retailers, not to mention specialist food sellers like farmers’ markets. And with many customers planning to trade down to cheaper brands, margins are bound to be affected across the board.
The biggest area where people are looking to cut costs is socialising. The average punter is planning to fork out £126 on painting the town red (and white) this Christmas, down 12% on last year. Deloitte suggests that lots of us will choose to have our parties at home instead: ‘It’s all about ‘in-tertainment’ this year, where staying in will be the new going out,’ says Teji (managing to cram two soundbites into one sentence – he should be a politician). So more rotten news for pubs, clubs and restaurants – though at least computer and karaoke game manufacturers should be pleased.
One possible strategy is to target those people who seem determined to spend money regardless, notably 16-24 year olds – 49% of these feckless youths are planning to have a good time at Christmas and worry about the cost later. Londoners are also refusing to bow to the inevitable – despite the carnage in the City, denizens of the capital are planning to increase their spending by 7%. Clearly the spirit of the Blitz lives on...
In today's bulletin:
Sainsbury profits from rivals' misfortunes
Jobless total hits 11-year high
Christmas isn't cancelled after all
Tory boost as SMEs blast the government
MT's Little Ray of Sunshine: Sloping off for the winter