One-third of customers ‘will spend less this Christmas’

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Efforts to predict the likely pattern of Christmas spending increased this week, with three different surveys suggesting consumers plan to spend less on food and other products.

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Despite this, the latest NielsenIQ consumer insights study said more than 60% of UK consumers are Christmas enthusiasts and will not change their Christmas plans despite economic challenges.

The NielsenIQ figures suggested 39% of the 1,000 people in its survey were “cautious consumers” who are likely to reduce spending.

The study found 22% were likely to look for food bargains in advance of Christmas if they became available.

Alwyn Venter, senior commercial business partner at NielsenIQ, said: “In our Christmas study, we have seen how much emotional value the holiday has for consumers in the UK.

“The majority do not want to give up the usual traditions and spoil themselves and their loved ones with gifts and good food.

“At the same time, the budget for the festive season has remained the same or even decreased for most people.

“Consumers are aware of how important it is, therefore, to make the most of their budget.”

The EY Future Consumer Index, also published this week, had a slightly higher figure of 43% for those expected to spend less over Christmas, up from 22% in the same survey last year.

The index found 29% were planning savings on food and 31% expect to spend less on alcohol. Like the NielsenIQ survey, the EY index expects consumers to be bargain hunting.

Silvia Rindone, EY UK&I retail lead, said: “In the face of rising inflation, rising energy prices and rising interest rates, consumers are being cautious in the run-up to Christmas.

“Our survey shows consumers are concerned about saving and affordability and are making more-considered choices about what they spend their money on.”

A third piece of research, from product intelligence platform Vypr, found that 35% plan to spend less on Christmas shopping, so in broad terms all three surveys agree.

Vypr found 90% were concerned about Christmas costs, with 33% defining themselves as moderately concerned and 56% very concerned.

Ben Davies, founder at Vypr, said: “We’re in the midst of a second “once-in-a-generation” crisis in the space of three years, and it’s clear that consumers are feeling worn down, whilst being highly anxious about household budgets as we approach Christmas.

“The only prediction we can make is that this Christmas will be very different and subdued to pre-pandemic festive periods in terms of allocation of in-home and out-of-home household spending.

“The discounters are likely to win big in food and drink, whilst e-commerce players offering strong value propositions will be the ones that win in non-food.”