According to market research firm Mintel, the driving forces behind Christmas spending in the UK this year will be bargain hunting and credit usage. While total spending is expected to increase by 3.6%, this growth is mainly due to inflation, and in terms of volume, sales are actually predicted to decline by 2.9% as consumers reduce their discretionary spending.
Mintel’s latest research shows that over half of consumers (51%) plan to stick to a stricter budget this holiday season due to financial concerns. The prevalence of “shrinkflation” in the news, where products are reduced in size but not in price, has also made consumers more price-conscious, with 56% saying they will pay closer attention to prices when shopping for Christmas gifts. Additionally, 28% of consumers expect to rely on credit to fund their holiday spending, which is a higher percentage compared to the previous year.
Interestingly, the research reveals that 25% of Britons plan to wait until Black Friday to take advantage of promotions and discounts before purchasing their festive gifts. Nick Carroll, Category Director of Mintel Retail Insights, acknowledges that retailers will face challenges during the holiday season, but sees signs of a recovery in consumer confidence leading up to Christmas. While consumers may be cautious in their spending intentions, they tend to become more carefree as the holiday spirit takes over. Carroll also notes that higher earners are driving the confidence recovery, while lower earners continue to face financial pressures.
This polarized spending period presents opportunities for retailers, especially in the value fashion segment. Customers will be mindful of their spending but still look for ways to enjoy the holiday season, making lower-priced pick-me-up items appealing. Mintel suggests that the widespread participation of retailers in Black Friday, along with early deals, will contribute to a large-scale event this year.
Overall, Mintel’s research highlights the importance of bargains and credit accessibility in shaping consumer spending habits during the holiday season. Retailers should take note of these trends and tailor their strategies to meet the demands and expectations of budget-conscious shoppers.
For more information on UK Christmas spending trends, visit:
https://www.mintel.com/press-centre/retail-press-centre/uk-christmas-and-boxing-day-sales-to-hit-595-billion-in-2019
To learn more about the impact of Black Friday on UK holiday shopping, click here:
https://www.businessoffashion.com/articles/retail/the-lessons-of-black-friday-take-hold-in-the-uk
