Bratislava, 12 November 2008: Deloitte has published its latest survey on the outlook for Christmas 2008 consumer spending. This eleventh edition of the survey covers 16 European countries including for the first time Slovakia, and one African country.

Christmas, a key period for consumer spending, is an atypical period during which consumers tend to veer from their usual purchasing behaviour. From its inception this survey was designed to predict consumer behaviour and only rarely has an unstable economic environment such as today’s played a role. In this context, any attempt to predict the level of Christmas purchases is subject to a considerable level of uncertainty. This is because consumers are necessarily circumspect, to say the least, regarding their year-end holiday purchasing intentions when they have to cope with a plethora of negative economic indicators on a daily basis. The survey was conducted by Deloitte in the last week of September and first week of October.

Slovaks’ view of the economy is optimistic

Last year’s survey showed that certain western European countries such as Great Britain, Ireland and Spain stood out from other countries thanks to their dynamic economies together with their optimism and healthy consumer spending appetite. Other countries, such as France and Portugal, were marked by weakening economies which led to very muted purchasing intentions for the holiday season.

This year’s survey shows that Europe as a whole has a common vision of the world economy and outlook for 2009. The fall has been all the steeper for those countries that were still doing well a year ago. But the negative view of the economic environment has been accentuated in countries such as France, Italy, Spain and Portugal, whose pessimism was already apparent a year ago.

Eastern Europe (in particular Slovakia) appears more optimistic with 66% of respondents having positive expectations of the economy. 43% of Slovaks (20% of Russians, 38% of Ukrainians, 45% of Romanians and 52% of Czechs) expect a deterioration in the economic climate in 2009 and believe they will have less or the same purchasing power than last year, even though thus far they have felt little direct impact from the financial crisis, which was only just starting at the time of the survey. Within this uncertain climate, 36% of Slovaks intend to increase the amount they spend on Christmas gifts.

Higher food and fuel prices are the main reasons for moderate spending
54% of Slovaks have said that they will cut back their Christmas spending due to increases in food prices and rising energy costs. The recent fall in energy prices will doubtless have a positive impact when Christmas shopping season begins. However, the fear remains that as they approach year-end, the various price rises consumers have had to endure during the year will make them think twice before making some purchases.

This trend is fairly widespread within Eastern Europe, with Western Europe once again having been more impacted by such increases.

Slovaks are exercising more self-control in reining in their consumer appetite

Slovaks want to go shopping this Christmas, but in a controlled manner in order to stay strictly within the budget they have set themselves. In fact, 32% of Europeans will be setting a Christmas shopping budget, which is an 8 point increase when compared to last year’s survey. Consumers are also wary of impulse buying, preferring to plan and make purchases only after careful consideration.

On the look out for useful products

In order to optimise their purchases, consumers are likely to buy products they see as useful and retailers who are able to satisfy this criterion and communicate accordingly over the Christmas period will surely come out on top. Since buying something useful helps to alleviate consumers’ feelings of guilt, retailers must satisfy this desire to consume while also providing good reasons for doing so. They will need to focus on special pre-Christmas offers and purchases made after the holiday period, which account for 29% of all purchases in Slovakia.

Wish lists differ from one country to another with books topping the list

Depending on the culture and the degree of economic development, gift preferences vary from one country to another. Slovaks are more inclined to want and buy traditional gifts. The demand for gifts in the form of money continues to rise, which reflects a persistent desire among Europeans to make their own gift choices or simply to have money to cover everyday expenses. For the Slovaks, the most popular gift purchases are books (57%), cosmetics/perfumes (55%), clothes/shoes (45%) and music/CD (24%). As far as the most desired gifts among Slovaks, the list includes books (61%), clothes/shoes (46%), cosmetics/perfumes (44%) and sport equipment/sportswear (28%).

Although the market is still dominated by traditional toys, an increasing number of electronic toys are making their appearance as gifts to be offered by adults to children. According to this year’s survey, for children under the age of 12 the Slovaks will buy creative toys/constructions (8%), vehicles, e.g. cars/trains (5%), and computer games (4%). Among the planned purchases for teenagers under the age of 18 computers/laptops (14 %), cash (9%), and mobile phones (8%) are at the top of the list.

The Internet is more and more popular
The Internet is becoming an increasingly popular source of information. This trend reflects consumers’ increasing interest (the demand still inadequately met) in gaining more information about sales points in order to compare prices and products. This trend is particularly noticeable in western European countries, while those of Eastern Europe have not yet reached the same level of Internet penetration. In Slovakia, 28% of the survey’s respondents use the Internet for this purpose. Consumers do not always complete their purchases online, however, and use the Web for preliminary research only. Only 21% of Slovaks using the Internet will make online purchases. To avoid crowded stores and to find a check out a larger range of products are the main reasons as much as 81% of most affluent Slovaks buy products over the Internet. This year’s survey shows that the top gifts purchased online will be books (52%), cosmetics/perfumes (27%) and music/CD (26%). For respondents in 11 of the 16 countries surveyed books will be the gift most purchased online.

Information about the survey:

Deloitte performed the consumer survey of year-end shopping in 17 countries of western and Eastern Europe and in South Africa. A similar survey was also performed in the USA. This year’s survey, which was given to 18,178 respondents older than 18 years of age from 16 European countries, was carried out during the last week of September and first week of October via the Internet, telephone or in person. The respondents’ panel in Slovakia included 609 individuals. Each respondent, as in the other countries where the survey was conducted, was identified based on social-demographic data, personal interests and consumer behaviour.

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Deloitte Central Europe is a regional organization of entities organized under the umbrella of Deloitte Central Europe Holdings Limited, the member firm in Central Europe of Deloitte Touche Tohmatsu. Services are provided by the subsidiaries and affiliates of Deloitte Central Europe Holdings Limited, which are separate and independent legal entities.

In Slovakia, the services are provided by Deloitte Audit s.r.o., Deloitte Tax k.s. and Deloitte Advisory s.r.o. (jointly referred to as “Deloitte Slovakia”) which are affiliates of Deloitte Central Europe Holdings Limited. Deloitte Slovakia is one of the leading professional services organizations in the country providing audit, tax, consulting, risk services and financial advisory services through over 250 national and specialized expatriate professionals.