Consumers think they’ll have more to spend…
PwC’s latest consumer sentiment survey has found that the majority of us think we will have more disposable income in the next 12 months. This is a reversal of our post-referendum survey in July, and sees sentiment reverting to the same level as earlier in 2015. Every region in the UK thought they would be better off, with the exception of the North of England and East Anglia.
…even though they say they’ll spend less on Christmas
One in three plan to spend less over Christmas, compared with one in ten planning to spend more. This is a pattern repeated across all age groups and regions in the UK, with the Scots and Welsh expecting to tighten their wallets the most. 6% of us don’t intend to buy any Christmas presents at all this year. However, with more money in their pockets, the spirit may be willing, but the temptation to spend more may be too great.
They’re planning to shop early…
According to PwC’s survey, 27% of consumers are planning to shop for Christmas presents earlier this year than last year. In fact, more than a third of consumers expect to do most of their shopping before 25 November, and only 7% (mostly men) intend to leave it for the week before Christmas.
…but not over Black Friday weekend
Only 13% of consumers are planning to do their shopping over Black Friday, with Londoners the keenest to bag a Black Friday deal. As Ted Baker founder and CEO, Ray Kelvin, stated “No one wants a Ted Baker gift bought in the Sale” .
We still think there’ll be a last minute rush…
With Christmas falling on a Sunday, and many people travelling home and stores closing early on Christmas Eve, many observers think the biggest shopping day will be Friday 23 December .
…provided the weather doesn’t get in the way
October, November and December have been warmer than average for the last three years in a row. If 2016 reverts to the long term average, a chillier than recent run up to Christmas could be good news for clothing retailers, unless we get the snow which depressed retail footfall by 7% before Christmas 2010 .
Shopping under one roof…
If the weather does turn out to be colder this year, and with petrol prices set to rise due to currency fluctuations, we expect shoppers to prefer “one stop shop” locations, whether they be destination shopping centres or department stores, where they can get everything under one roof with less driving and less exposure to the elements.
…or from the comfort of your own home
While store sales have grown by barely 1-2% over the last year, online sales have continued to grow in double digits. As consumers expect to shop earlier this year and retailers have continued to invest in logistics and final mile delivery solutions, will click and collect growth slow, as consumers come to expect more reliable and convenient home delivery?
From things, to experiences…back to things?
One of the most talked about trends last Christmas was the advent of “Peak Stuff”, as consumers spending grew more quickly on leisure than retail. However, our US colleagues have started to see this trend reverse, especially amongst Generation Z (under 21s), who are more interested in tangible gifts, like personal electronics, clothing and toys, than experiences. Will their preferences rub off on other generations? What we can tell is that, as a direct result of the EU referendum, 16% of consumers expect to spend less on eating out and 16% less on going out, so it’s possible that economising on leisure could help fund more spending on retail.
Gifts crafted for you
PwC’s US consumer survey also found that three-quarters of shoppers planned to shop at local retailers and a third would give handmade gifts over the holiday season. For UK retailers, does this signal a boom in personalised gifts and the crafts sector?
Spending less on electronics and toys…
With no major consumer electronics product launches anticipated in the final quarter of the year, Currys PC World’s top Christmas product predictions  feature relatively small ticket wearables, smart toys and kitchen aids, while Argos’s top toy predictions  include dolls and cuddly animals. Without significant innovation, perhaps it’s no wonder that consumers expect to spend less on electronics (24%) and toys (23%) this year.
…but Christmas dinner is safe
While consumers say they will spend less across the board, they won’t be skimping on Christmas dinner itself. Only 13% expect to spend less on the traditional festive feast. So it seems that some traditions are still too important to be compromised over.