The Christmas Economy
In the UK, we are forecasted to spend £78.69 billion on Christmas this year, with the average family splashing out £1,149.
According to the Bank of England, in December alone households spend £500 more than the average month on presents, food, drink and socialising. But with inflation reaching a five year high of 3% in September and October, 0.9% above the rate of wage growth, consumers may be feeling an extra pinch this year.
Presents are a big part of the Christmas budget, with the average Brit expected to spend £243.43 on gifts this year. Popular on the Christmas list are often tech gadgets and electronics such as mobiles, but the cost of a premium smartphone has increased dramatically in the last few years. According to technology analysts Gartner, average smartphone prices rose by 10.2% in 2015, 16.7% in 2016 and 6.7% this year.
It’s not just technology products that have become more expensive – prices in the online clothing, shoes and accessories market increased by 11.5% between November 2016 and 2017, research by WGSN Instock reveals.
Brussels or bust?
Overall food and soft drink prices have risen by 4.1% in the year to October. But consumers will have to fork out even more for their Christmas dinner this year. Prices of Brussels sprouts are up 8.4% compared to last year, with Christmas puddings seeing a 7.7% rise.
This is perhaps making shoppers savvier, with 43% planning to get their food shopping across several shops, rather than purchase everything from one place.
UK shoppers are estimated to spend a record £4.2bn on food and drink in the week leading up to Christmas 2017.
Christmas shopping habits
One in three people finds Christmas more of a concern compared to last year. As a result, findings from the IGD reveal that 45% start their Christmas shopping earlier to spread the cost, up from 35% in 2016. With Black Friday becoming increasingly popular in the UK, shoppers are incentivised to start purchasing Christmas presents earlier to bag a bargain.
With more and more consumers looking online for the best deals, the value of online shopping as nearly doubled in the last three years and now accounts for £1 for every £6 spent. In 2016, we spent £25 billion online for Christmas, with this figure expected to rise by 11.8% this year.
If you wish to discuss how this may impact your business then please get in touch with our Retail team on 01903 234094.