The Retail Review - Christmas Retail Survey 2008
For the majority of consumers it will be Christmas as usual
The threat of recession, unprecedented shocks to the global financial markets, falling house prices and rising cost of food and fuel is hardly the backdrop to encourage festive cheer. Consumers are heading into Christmas with their confidence at record lows.
In line with this, our research shows that overall anticipated spend on Christmas gifts, food and socialising is down this year, driven by nearly a quarter of consumers who are clearly being squeezed the hardest by the cost hikes and job security concerns.
However the suggestions that Christmas will be cancelled altogether, in our opinion, have been over played. For the majority of consumers it appears to be Christmas as usual, with 57% of consumers planning to spend the same as they did last year. And although it seems incongruous that 19% are planning to spend more, most of these consumers in this from the younger, less economically sensitive 16-24 year old group.
Staying in is the new going out with consumers planning to cut back what they spend on socialising out of the home to stay in and entertain family and friends. Price is back on the agenda and we will see more shopping around and more trading down, particularly in food this Christmas than in the past. Consumers are also going to seek more bargains this year. When it comes to giving, the provenance and austerity sentiment comes out through as consumers buy practical gifts.
Consequently retailers will see an increasingly competitive environment in the run up to Christmas. There will be winners and losers, with retailers having to work harder to get every extra pound through their tills. The need to create compelling propositions in store or online is even greater this year than before, as retail cost growth is likely to continue to outstrip sales growth. Delivering product relevance, communicating strong value for money and offering genuine promotions will be critical to drive footfall and traffic. For now we see a supermarket sweep with out of town and department stores losing out this Christmas.
For further information, download the full report 'The Retail Review – Christmas Retail Survey 2008'. (PDF, 845KB)
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