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Contact: Irene O'Gorman
Deloitte
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Deloitte Annual Christmas survey reveals Irish consumers plan to increase their Christmas spend while other European nations tighten the reins on their Yuletide shopping bill.  According to Deloitte's seventh annual consumer survey of Christmas spending plans, Irish consumers are planning an increase in their individual spending on Christmas gifts of 8 per cent this year.  This is the biggest increase across the 9 countries surveyed and puts them in line to be the biggest spenders across the region. This trend is at odds with much of Europe where spending intentions are flat, if not slightly down on last year.

"The Irish economy continues to perform strongly, and as expected this feeds through to consumer confidence.  Our survey shows that Irish consumers have a high degree of job security (77 per cent) and are optimistic about their personal financial situation, with 76 per cent indicating that they expect their financial situation to stay the same or improve over the next year.  This contrasts sharply with the European average for job security (50 per cent) - indicating no improvement in the consumer confidence across our EU partners," said Cormac Hughes, Partner in Deloitte.

According to the 84 per cent of Irish respondents who expect to spend at least as much if not more than they did last year, the main reasons for doing so include improved household income and more innovative and interesting presents to choose from. The Deloitte survey anticipates that the diversity of innovative products that have been brought onto the market this year will generate more demand, especially for children's presents.

Of the 9 per cent of Irish people who plan to spend less this year, the high cost of living and saving money for things like a new house or additional holidays are the reasons for cutting back on Christmas spending.

Spending on gifts

Based on responses from 6,800 consumers across nine EU markets, Irish consumers emerge as Europe's big spenders this Christmas. Gift spending intentions are expected to increase in Ireland by 8 per cent, compared to 6 percent in Spain, but noticeable reductions in spending are planned in Germany (down 9 per cent), Portgual (down 6 per cent), Italy (down 6 per
cent) and the Netherlands (down 5 per cent) from last year.

Among the main drivers of consumer confidence linked to shopping attitudes during the Christmas period are:
* Perception of the economic background: 86 per cent of Irish consumers are very optimistic about the economic outlook in 2006
* Job security perception: 77 per cent of Irish consumers are optimistic about the security of their job
* Current households' revenues and short term perspectives: 76 per cent of Irish consumers expect their financial income to stay the same or improve

Christmas spirit still hanging on in Europe

European consumers are still closely attached to the importance and tradition of Christmas and although presents for their kids and spending on food will be preserved, attitudes vary significantly. French people are the most protective of the tradition of providing gifts to their children, while the Dutch and the British are more ready to sacrifice it to save money. When it comes to food, the British, and surprisingly the Italians and the French will cut down. Irish consumers also topped the list of Europeans for decorating their houses with 95 per cent planning to decorate their house this year (European average is 88 per cent).

Gaps between wish lists and gifts remain, but they are narrowing. The biggest gap is expected in the cosmetics area (more offered than wished).

The "kids enigma"

When it comes to kids, 56 per cent of Irish respondents claim they know what their children's most wanted presents are. European adults, however, differ about the fun-only/educational nature of children's gifts: while British, Irish and Germans prefer fun, Dutch and all southern countries' adults prefer to buy "useful" presents, with an educational role.

Traditional toys are the most bought presents for Irish children under 12, followed by books and electronic games. Among the toys that Irish parents will go to the ends of the earth to find this Christmas are Microsoft Xbox 360, Sony PSP, and Star Wars; Batman and Power Rangers remain popular for boys, while top of the wish list for girls are Bratz and Barbie.

In Ireland, 44 per cent of respondents consider how goods have been sourced in relation to fair trade and child labour. This is in line with our European neighbours, where half of the respondents said they look at the ethical background of goods before buying them for Christmas presents.

When it comes to where to shop, many Irish people (40 per cent) will decide at the last minute. According to Cormac Hughes of Deloitte, "this presents a good opening for retailers in the battle for the consumer wallet. Christmas, with its large sales volumes, is an opportunity to attract and, when successful, permanently re-route customers to their shops".

Loyalty programs are on the increase with shops increasing the effort to retain existing customers and everywhere in Europe more points will be redeemed this year than last year. Ireland showed the biggest increase in the use of loyalty points with almost 60 per cent of respondents planning to redeem points to buy presents (compared to a European average of 40 per cent).

Across Europe, the internet will be helpful with shop selection becoming more and more difficult. The internet is used to browse for products and stores (75 per cent), for price comparisons (54 per cent) and as a store itself (more than 50 per cent of the respondents will buy products and services on the internet this Christmas season). Internet maturation has added a new actor everywhere in Europe: 62 per cent of the consumers will spend the same amount or more on the internet this year compared to last year.

"Last minute shoppers will be a capricious but significant market to capture. This year again, the marketing and promotional initiatives that retailers will perform in the last weeks before Christmas will be crucial to drive into their stores a vast majority of consumers having not yet made their shopping decisions," comments Gilles Goldenberg, Deloitte partner in charge of "consumer business" for Europe

ENDS

About this survey

The Deloitte 2005 Christmas Survey, which is designed to measure consumer expectations about Christmas expenses, has been conducted by Deloitte each year since 1998. This year's survey polled 6.800 consumers across nine EU markets (France, Germany, Italy, Belgium, Ireland, the Netherlands, Portugal, Spain and the UK), comprising a representative sample of the population. It was conducted on the Internet by an independent research company.