Cash Tills Ringing for Christmas

Latest research from Mintel finds consumer confidence in the UK running high for Christmas 2002. Research questioning 1,024 adults finds some 35% of consumers expecting to spend more this Christmas compared to last, with 7% anticipating spending substantially more.

Those claiming to spend substantially more are likely to be among the youngest age groups, particularly those in Yorkshire/North East and North West and those with young children. The fact that consumers with young families feel particularly confident is a very encouraging finding for retailers as these families are likely to be spending most on Christmas items. Just a quarter of shoppers are concerned enough about the state of the economy to think that it may have an affect on their Christmas spending. 'If there are any concerns in the UK about the future economic climate they are no more than was the case last year and if anything consumers appear more confident' comments Richard Caines, Retail Analyst.

Overall, the average adult is expected to spend around £318 on gifts for close family and friends this Christmas. Nevertheless, there are wide variations on this figure, with men(£324) expecting to spend more than women(£312). Some of the largest differences are by age group, with amounts expected to be spent ranging from £220 among 16-24 year olds to £450 among the 35-44 age group. By region, those in the North West(£355) and Yorkshire/North East(£344)expect to spend the most, while those in Wales/West/South West(£293)and Scotland(£308)expect to spend the least.

Whether shoppers actually spend the amount they expect to is somewhat doubtful, since 54% agree that they usually spend more than they plan to and only 39% actually keep to their spending budget.

The most popular type of presents this Christmas will be clothing, footwear and jewellery, with eight out of ten adults planning to buy one of these gifts. This ranks slightly ahead of pre-recorded music, video, DVD and computer software at 77%. Around seven out of ten consumers plan to buy books and perfume, aftershave and toiletries.

In comparison to last year, the sector which is likely to come under greatest pressure will be toys & games, with 62% of adults planning to buy these as gifts in 2002 compared to 67% in 2001.'Toy retailers could find it more difficult to tempt shoppers to purchase traditional toys and games as children continue to demand more grown up presents. Getting products in their stores with the right appeal to tweenies will continue to be a challenge, as kids grow older younger' comments Richard.

Town and city centres are by far the most popular destinations for Christmas gift shopping with 90% of consumers using or intending to use the high street and 76% planning to visit covered shopping centres in town or city locations. Out-of-town locations are also important with 53% of adults planning to Christmas shop in a grocery superstore and 51% in out-of-town shopping centres. Some 22% of adults will be shopping via the Internet, this rises to a staggering four in ten 16-19 year olds.

Once again retailers will not know how well they have done until their tills are shut down on Christmas Eve, as 40% of consumers admit to usually leaving Christmas shopping to the last minute. Nevertheless, some 45% of adults are considerably more organised, starting Christmas shopping early to spread the cost. Although over half of adults usually spend more than they plan to, relatively small numbers (15%) are prepared to go into debt in terms of increasing an overdraft, spending more on a credit card or taking out a loan. Given the pressures on consumers, particularly families, to spend at Christmas this is surprisingly low, but perhaps some are reluctant to admit going into debt.

There has been a dramatic decline in the number of consumers planning to keep some money back to spend in January sales at 27%, compared to last year's 40%. 'It seems the popularity of the January sales has been waning over recent years and this is largely a reflection of a retail market where there is more focus on price generally and more frequent sales throughout the year. There has also been a trend towards retailers starting their sales in December, as a result January sales have become less influential. For shoppers, missing the January sales is no longer a big loss as they know they won't have to wait long for the next sale period and many retailers they shop at are offering value prices on a permanent basis' comments Richard.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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