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London, November 25, 2003 — A shift in European consumer confidence and optimism will drive reduced spending levels for Christmas 2003, according to Deloitte’s 5th annual consumer survey of Christmas spending. Based on response from almost 5,000 consumers across six EU markets, for the first time since 1998 consumers are prepared to spend less at Christmas time this year than they did in the previous year. The European anticipated average spending is €706. The survey identifies four key consumer trends:

Consumers are cautious about spending this year  Some 38% of European consumers (male and female) say the economic downturn will impact their spending this year. Belgian, French and German consumers are particularly negative about the economic outlook. On the contrary, Irish and Swedish are very optimistic. Some 44% of European women declare they feel the recessionary impact. Retailers should take particular note of this, since the majority of gifts are purchased by women.

Moreover, confidence for the consumer economy in 2004 is poor. Germans are the most negative: almost 60% anticipate a lower disposable income next year. The Swedish are the most positive: 40% of them expect income growth. Since income is the main driver for Christmas spending through Europe, the year-end shopping will likely be affected. German consumers are expecting to have the most significant decrease in their spending. The average gift purchase by consumers in the six EU countries interviewed in this survey will likely be €394 (against €446 last year).

Last minute shopping plans  Some 70% of European consumers haven’t decided yet where they will buy their gifts. This presents retailers with an opportunity to capture those uncertain consumers through attractive promotional campaigns in December. The majority of the German, Italian and French consumers surveyed will wait until the last moment to do this year’s Christmas shopping, while the Swedish, Belgians and Irish have already planned their shopping.

Anticipated discounts are the main reason for last minute purchases. Across the countries surveyed, consumers expect an average discount of 20% by shopping at the last minute. One consumer out of five in the European countries surveyed intends to wait until the sales period after December 25 to make their purchases. German and Swedish consumers cannot, however, imagine celebrating Christmas without having already purchased their gifts, while 35% of Italians will wait for sales.

New shopping attitudes are emerging  Increasing use of gift certificates, shopping after December 25, and a more diverse array of products and personal services as gifts — such as travel — show a change in the traditional attitudes towards Christmas shopping.
Shopping on the Internet continues to increase in popularity. Almost 42% of consumers surveyed say that they will spend more on the internet for Christmas this year. However, 18% say they will spend less on internet shopping.

Top hit gifts 2003  Video games mania is visible all over Europe. Books have disappeared from the top ten gifts for kids except in Sweden and Italy. Bestsellers are likely to be Nintendo and Playstation video games. Barbie remains popular.

Gift certificates are the runner up on the wish lists for adults across Europe: they are in the top five gifts in four of the countries surveyed. The strong growth in purchases of gift certificates in recent years stems from the added conveniences to all parties — the time-pressed shopper, the recipient who obtains the gift of choice, and the retailer, who handles fewer returns and is likely to secure a sale that is worth more than the value of the gift card, and benefits from post-holiday consumer spending. For adults, DVDs, CDs and books are still firm favourites. Flat screen TVs and computers lovers may have to wait another year.

"Since European consumers are cautious and uncertain, retailers still have a few weeks to attract them through promotional campaigns," concluded Gilles Goldenberg, Deloitte partner in charge of consumer business for Europe.

Editor's note: PowerPoint slides summarizing the survey data in graphic format are available upon request.

About this survey
The Deloitte 2003 Christmas Survey, which is designed to measure consumer expectations about Christmas expenses, has been conducted by Deloitte in November each year since 1998. This year's survey polled 4,788 consumers across six EU markets (France, Germany, Italy, Belgium, Ireland, Sweden), comprising a representative sample of the population. It was conducted on the Internet by an independent research company.

About Deloitte Touche Tohmatsu
Deloitte Touche Tohmatsu is an organization of independent member firms devoted to excellence in providing professional services and advice. We are focused on client service through a global strategy executed locally in nearly 150 countries. With access to the deep intellectual capital of 120,000 people worldwide, our member firms, including their affiliates, deliver services in four professional areas: audit, tax, consulting and financial advisory. Our member firms serve more than one-half of the world’s largest companies, as well as large national enterprises, public institutions, locally important clients and successful, fast-growing global companies.

Deloitte Touche Tohmatsu is a Swiss Verein (association), and the services described herein are provided by the member firms and not by the Deloitte Touche Tohmatsu Verein. For regulatory and other reasons, certain member firms do not provide services in all four professional areas listed above.