British Christmas Shoppers Buy More for Less
January 19 2004
Good news from GiftTrak, TNS's continuous gift purchasing survey, for those opposed to the commercialisation of Christmas: Britons' spending on Christmas gifts did not keep pace with inflation this year, rising by less than 1% to £15.1bn. The number of gifts increased by 4.3% but the average cost per gift was less.
Nearly 600 million gifts were purchased in Britain during Christmas 2003, compared to 568m gifts purchased in 2002 at a value of £15bn. While in recent years the average cost of gifts has showed a consistent year-on-year increase, this year it declined from £27.51 to £26.47 per gift.
TNS cites three main factors in this:
- Major multiples have continued to increase the competition on prices across a number of non-food categories (i.e. children's clothing, toys and games, CDs, video/DVDs, books, toiletries and cosmetics)
- Most High Street retailers offered promotional deals (e.g. 'mix & match', '3 for 2')
- A slow start in November / early December led retailers to discount goods prior to Christmas.
Toys and games remain the most popular gifts but the total value of toys and games purchased for Christmas 2003 fell by almost 12% vs 2002, largely as a result of falling prices for electronic gifts such as computer consoles and computer hardware/software.
The jewellery category has bucked the market trend with strong growth both in the number of gifts sold (up 25%) and the total market value (up 12% to £1.6bn) - implying a 10% fall in the average cost of a gift [
but still, no doubt, leaving it considerably above that of a prawn sandwich - Ed]. DVDs continue to be the fastest grower, fuelled by a significant fall in the cost of players.
Perhaps more surprisingly, the growth in internet shopping for Christmas gifts has slowed considerably compared to last year (26% growth in Christmas 2003 vs 90% growth in 2002). Despite almost half of people in Britain now using the Internet, online shopping still only accounts for five per cent of all Christmas gifts purchased.
According to TNS Senior Researcher Alex Seron 'fierce competition between retailers in the run-up to Christmas saw a significant reduction in the cost of many gifts. The competitive pricing strategies adopted by retailers this year appears to have successfully stemmed the flow of what many feared could have been a poor Christmas performance. However it remains to be seen how these strategies have affected companies' profit margins in the short term and what impact they will have on consumer behaviour in the future.
'Following years of steady price increases, this fall in the cost of gifts marks an important change in the retail market' says Seron. 'Will consumers now expect special offers and price reductions as a matter of course at Christmas? If so, retailers will have to look at new ways of sustaining sales'.
GiftTrak conducts interviews with a representative sample of 50,000 respondents aged 16 years and over every year. It records detailed information on gift purchasing including average spend, retail outlet, method of purchase and gift occasion.
All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
