Christmas spending takes a hit
The cost-of-living crunch will play out in Christmas sales figures with nearly half of UK consumers (43 per cent) expecting to spend less this festive season according to the EY Future Consumer Index.
The survey found that 67 per cent of consumers are now ‘extremely concerned’ about the rising cost of living and as a consequence spending on gifts will be significantly lower, with nearly one-third (34 per cent) planning on spending less on presents for friends and family.
The 11th edition of the survey of over 1,000 UK consumers found that falling consumer confidence due to the cost-of-living crisis will have an impact on a number of Christmas spending habits.
One in ten (12 per cent) shoppers said they will be cutting back on celebrations and expect to have smaller events this festive season, more than one in four (29 per cent) are planning savings on food, while nearly one in three (31 per cent) expect to spend less on alcohol.
Present giving will also be affected, with 43 per cent of consumers planning on cutting back on gifts for friends and 34 per cent planning on cutting back on gifts for family.
The survey also found that consumers are increasingly likely to do their bargain hunting in-store this year, although online shopping remains key with two-fifths (41 per cent) of shoppers planning on doing most of their deal hunting online this year.
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 that consumers are concerned about saving and affordability and are making more considered choices about what they spend their money on,” she said.
“This year, consumers are likely to delay spending as late as possible to manage increased uncertainty about their finances. But with heavy discounting from major retailers starting very early, retailers are trying to tempt shoppers to bring forward their Christmas spending.
“Consumers are going to be focusing less on indulgence and more on usefulness, so retailers and brands will need to ensure they have the right products in stock for smaller, more close-knit events and thoughtful gifting.”
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