The FINANCIAL — With Black Friday and Cyber Monday done for another year, both retailers and shoppers have well and truly turned their attention to the festive season.
New Christmas trading analysis from PwC shows UK shoppers are preparing to spend an average of £420 on Christmas presents this year. Those in the 35-44 year age bracket are going to shell out the most (£522), and shoppers in Scotland will have the highest average spend (£454) of all the UK regions.
“2018 has been full of commentary about squeezed consumer spending and its contribution to the obvious distress on the UK high street”, Lisa Hooker, Consumer Markets Leader at PwC, said. The first half of the year in particular was very tough, with inflation rising about earnings. But, there should be some Christmas cheer for retailers as we close off 2018 – our research shows that people will be hitting the shops in earnest this Christmas time. Overall, spending levels will be similar to last year, but what people spend their money on may be different – it looks as though more money is being spent on the essentials – Christmas dinner, food and drink, and children’s clothing.
“Alongside one-off Christmas spending, there are a number of promising signs the doom and gloom for consumers is letting up. Absolute pay is growing faster than inflation and our consumer sentiment survey found that marginally more people think they will be better off in the coming year than worse off. It’s tentative, but promising.”
According to respondents, one in five consumers claim to have started their Christmas shopping earlier this year with the figure rising for under 35s in particular (over 30%). Twenty percent of consumers say they did most of their Christmas shopping over the Black Friday/Cyber Monday weekend. Although the most popular time for buying Christmas presents is early-to-mid December, 6% of respondents, the vast majority of whom were men, say they intend to shop the week before Christmas because they have no time before then.
When asked what they’ll be prioritising when it comes to spending money this Christmas, shoppers told us they would be spending more on food and drink, Christmas dinner, and children’s clothing. The main categories where shoppers will spend less on presents include adult clothing and electricals and technology, which were the two most popular categories of spending in the Black Friday sales.
“With Christmas Day falling on a Tuesday this year, we believe that retailers may have a bumper shopping weekend as consumers will have a full weekend to make last minute purchases”, Kien Tan, Retail Strategy Director at PwC, said. “We could even seen an increase in high street footfall that weekend, which makes a change to the last few Christmases”.
“With people saying they would spend more on electricals and fashion over Black Friday, it’s no surprise that those are the two categories cited as the lowest priorities for Christmas itself. Black Friday seems to have become the main period for indulgence, fun and self-gifting, while Christmas has reverted to its more virtuous roots.”
A sustainable Christmas
Sustainability has emerged as a key consumer trend of 2018 and set to play a key role this Christmas. The scale of consumer interest in the topic has taken some in the industry by surprise. Already this Christmas, one of the most talked about advertising campaigns has been around the impact of palm oil on rainforests. If current trends are anything to go by, other single issue campaigns are likely to emerge in the coming months, for which retailers need to be prepared.