UK consumers to outspend Europeans for Christmas says new research

By

Sandra Halliday

Published
Nov 2, 2017

Recent consumer confidence surveys showing shoppers feeling gloomy about the economy but prepared to carry on spending appear to be partially borne out by a new survey. It shows Britons will spend much more for Christmas than their European counterparts.

That willingness to spend could also be a reason retail sales were so weak in October after September had looked relatively bright. Perhaps shoppers are saving their cash in order to splash it on partywear, gifts and food later this month and into December?

However, if we dig a but deeper, it’s clear that Britons aren’t going to go wild this year.

The survey from VoucherCodes and the Centre of Retail Research spoke to over 2,000 adults and may have found that families plan to pend 54% more than their European counterparts on gifts, food/drink, and Christmas decorations, but spending growth is weak. Christmas spending during the key final six weeks of the season is set to rise by only 1.4% year-on-year (to £78.69 billion) with household spend at £821.25 each. Given that inflation is running close to 3%, that actually represents a cut in real terms.

But the fact that Britons will spend significantly more than Europeans ( who are planning for a near-€613 household  budget) does offer some hope for the battered UK retail sector.

ONLINE STRENGTH

However, where people do increase their spending, it looks like e-tailers will see the most benefit as spend there is set to rise almost 12% compared to 2016 and smartphone-based shopping will be key.

Overall in Europe, spending on mobile is forecast to rise to 44.3% (£28.57 billion) of online business. But UK shoppers are ahead of the trend with their smartphones, with an expected 54% of Christmas online sales to take place on mobile. Only shoppers in Germany are predicted to come close at 50.2%.

The disproportionate rise in e-sales means physical stores will see sales falling by 2.5% in the UK. That’s over double the European average where store sales will be down only 1.1%.

The reasons for people going online are to avoid busy crowds (68%), escape the long queues (62%) and to more easily compare prices and reviews (50%). Meanwhile, 23% will plan to exclusively shop online to avoid having to put up with repetitive festive jingles. Recent news stories have suggested that retailers are still heavily committed to festive music, even though trade unions have complained that it’s stressful for staff and than many consumers don’t like it.

That said, physical stores are still important. Consumers also say that being able to touch and feel the products before making a purchase (59%) is the biggest advantage associated with shopping in-store, in addition to being able to get the item immediately (49%).
 
GIFT FOCUS

So what will consumers buy? Of the £78.69 billion that will pass through the tills and online baskets, gifts come top, on £475 per household, with food and drink next on £225. But travel is biggest growth area with a 7.2% rise to nearly £90 while decorations will be up nearly 7% to £31.

For gifts, alcohol, cosmetics, jewellery, toys and books remain popular choices, as they will all be up year-on-year. But money and gift cards are set to fall by 10.5% while clothing should dip by 1.7%.

The survey  showed that to help spread the cost of Christmas, 15% of people in the UK have been buying items throughout the year, while 12% will wait for popular discount shopping days such as Black Friday to pick up bargains. Surprisingly, 4% claim they finished their Christmas shopping before Halloween, perhaps to give themselves additional time to pay off debt and store cards before the end of the year.