Deloitte Christmas Spending Survey 2011
Irish Christmas spending set to decline again this festive season.
However Ireland reclaims title of Europe’s biggest spenders.
Loyalty points schemes usage to increase.
The annual Deloitte consumer survey of Christmas spending predicts that Irish consumers will once again be the highest spenders in Europe this festive season, despite the fact that the average spend per household in Ireland will be €943 down from €1,020 in 2010 and a reduction of €411 since 2008.
Over the last two years, shoppers in Luxembourg had overtaken the Irish in terms of spending. Consumers in Luxembourg will spend on average €923 per household. The most frugal spenders in Europe this festive season will be those in the Netherlands, who will spend on average €260 per household.
The survey, which was carried out in the second and third week in September, shows that of the average spend in Ireland this festive season, €520 will be spent on gifts, €258 will be spent on food, and €165 will be spent on socialising. This year Irish consumers are predicting that they will spend 9.5% less on gifts, 5.5% less on food and nearly 4% less on socialising.
Overall spending amongst Irish consumers continues to fall, with consumers indicating that they will spend in total 7.44% less this year. Across Europe, consumers are likely to spend on average 0.78% less this Christmas.
Commenting on the figures, Richard Howard, Partner, Deloitte said:
“Following a steep decline of 10.6% in spending last year, it’s somewhat encouraging for retailers that the drop in spend is not as significant as last year, and it’s interesting to see that Irish consumers have regained the crown of top spenders in Europe. Through the last number of years, it has been abundantly clear that despite the fiscal pressures they face, the desire to embrace Christmas and enjoy the festivities has remained strong!
“That said, the prudency and increased frugality observed in previous years remains a feature of Irish spending – 59% of respondents identified that the main reason for spending less is the economic downturn and the belief that it will get worse. 33% indicated it was because they are in debt. It’s interesting to note that over three quarters of Irish respondents believe that the economy is in recession, which highlights how the negativity of the past few years have pervaded the mind set and behaviour of Irish consumers - the Irish economy has in fact achieved moderate growth in 2011. However, this is not affecting consumer behaviour or sentiment. Be it buying fewer gifts, buying more own brand products or an increased focus on utility and durability, retailers must meet the needs of an increasingly experienced and savvier Irish consumer, one which is here to stay. Consumers now expect more for less.”
What are Christmas shoppers looking for this year?
Once again, utility, durability and value for money will be important considerations for Irish consumers when buying gifts this year.
• 72% indicated that they will focus more on buying less expensive gifts
• 83% will buy more products and gifts that are on sale
• 84% will focus more on buying useful gifts
• 69% intend to increase their purchase of discount or retailers’ own label products, and few branded products.
• Over half of respondents (54%) also intend to buy for less people this year.
Interestingly, the survey results show that Irish consumers allocate their budget differently depending on their sex and age; women tend to focus more of their spending on gift items, while men prefer spending money on food. Seniors are more likely to devote their Christmas budget to food items, while younger people are more likely to spend their money on gifts.
Of particular note for retailers is the fact that Irish consumers will increasingly be using loyalty point schemes this year. In addition to the 42% of respondents who indicated that they will be using these to the same degree as last year, 39% indicated that they would increase their usage.
Once again this year, for those Irish consumers that indicated they will spend more over the festive period, the main reason to do so is to enjoy themselves and avoid thinking about the economic situation!
Consumers' use of online and offline channels when shopping
Consumers across Europe, including those in Ireland, are increasingly using the various channels available to them for both researching and buying their purchases. 51% of Irish respondents will use both offline and online channels to search for purchases, and 57% will use both to compare products. However, half will make their purchases in physical stores; 39% will buy from both channels. 55% of Irish respondents indicated that they use social media outlets to search, compare or both. Just 22% of Irish respondents indicated they have used their mobile phone to buy a product; however 42% indicated that they will do this in the future.
Howard commented: “By combining the respective benefits of the internet and physical shops, all of shoppers’ needs can be met, thus underscoring the importance of adopting a cross channel strategy. For example, online channels score highly in terms of speed of shopping and around the clock shopping; however, in terms of after sales service and ease of exchange, physical shops are the preference for Irish consumers. What retailers may increasingly need to look at is making online facilities available at their physical premises – for example, the availability of a Wi-Fi connection or computers in store will enable consumers compare products there and then and help the decision making process. However when asked to rank the areas in which retailers could improve their shopping experience, e-commerce ranked third, behind both lower prices and the customer relationship – value for money is front of mind.”
70% of Irish respondents indicated that they would buy gifts in traditional department stores; 68% in speciality chains and 59% in hypermarkets. Hypermarkets are the top choice for buying food, as identified by 84% of respondents, followed by normal sized supermarkets (41%).
An increased number of respondents now intend to do their Christmas gift shopping in November, up 7% on last year to 28%. A third plan to do their Christmas shopping in the first two weeks in December.
Books and cash are the most wanted Christmas gifts amongst European adults. Books are the first choice in 13 countries, including Ireland. Gift vouchers have lost ground and are now the most wanted gift of only 29% of Europeans, down from 36% in 2010.
Top 10 most wished for adult gifts in Europe
• Books (52%)
• Cash (52%)
• Gift vouchers (45%)
• Clothes/shoes (42%)
• Jewellery/watches (36%)
• CDs (34%)
• Cosmetics/perfumes (32%)
• Laptop/PC computer (31%)
• Beauty care, massage, spa treatment (31%)
• DVD/Blu Ray (30%)
Top 3 adult gifts most likely to be purchased:
• Cosmetics/perfumes (64%)
• Chocolates (55%)
• Beauty care, massage, spa treatment (54%)
When purchasing gifts for the under 12s this year, infant and preschool toys (46%) are the most favoured option by Europeans, followed by games and puzzles (43%). Irish respondents also identified infant/preschool toys and puzzles as their top two choices. With regards to buying for teenagers, video games are the preferred option amongst European respondents, as identified by 29%. This is followed by CDs (23%) and cash (22%). The top choice amongst Irish respondents is CDs.
Looking ahead to the new year, 36% of respondents believe their spending power will deteriorate in 2012, consistent with last year’s figure of 37% and 2009’s figure of 35%. In terms of cutting back next year, Irish consumers indicated that they were prepared to cut back on eating out (81%), household goods (81%), entertainment (76%), clothing (77%) and holidays (72%).
Notes to editors
About the research
This is the tenth year Ireland has participated in the Deloitte Annual Christmas Spending survey. This year’s survey was performed during the second and third week in September. Respondents are aged 18 years and older. Information has been collected via internet, with a structured questionnaire for a sample of individuals, within controlled panels. Each consumer in the panel is identified through the following dimensions: socio-demographic, personal interests and consumer behaviour. The survey was carried out in 18 countries from Western Europe, Eastern Europe, and in South Africa. The sample size in Ireland was 780.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ie/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
The information contained in this press release is correct at the time of going to press.
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