Retailers in for challenging Christmas as UK consumers spend less
According to business group, Deloitte, the retailing industry could face ‘one of the toughest in decades’ this Christmas as UK consumers tighten their purse strings.
The organisation said the average consumer plans to spend 7% less than last year. In its 14th annual Christmas Retail Survey, Deloitte found that while 24% of UK consumers intend to spend less this Christmas, 57% however, planned to spend the same, while a further 19% of respondents said they expected to spend more.
The survey, which questioned 1,000 people across the country, found that the total average amount people predict they will be spending this festive season is £655, which will be primarily on presents, socialising and food and drink.
While the overall spending amount is set to fall by 7% from last year, it is socialising where the biggest cutbacks are planned – 12% less than last year.
An increasing amount of people plan to shop at supermarkets this Christmas for gifts as frugal shoppers look for lower prices.
Meanwhile, a separate survey of parents discovered that many were planning to reduce spending this Christmas, and that 10% were worried that the main bread winner would lose their job within the next six months. Figures out yesterday from the Office for National Statistics (ONS) revealed that UK unemployment is at an 11-year high.
According to Richard Hyman of Deloitte, this is the worst Christmas for a generation, however, all is not lost because, as a nation, we will be spending £36 billion.
However, Mr Hyman said retailers will be optimistic that last week‘s 1.5% cut in interest rates will encourage spenders back to the shops.
In related news, this week the British Retail Consortium (BRC) said UK retail sales have fallen over a 12-month period for the first time in 3½ years.
According to the BRC, like-for-like sales in October were down 2.2%, while total sales were 0.1% lower compared with October last year.
The figures are further proof that the High Street is suffering in the wake of the economic downturn.
Stephen Robertson, the BRC’s director general, said these are seriously poor numbers, particularly in the build-up to Christmas. The poor sales figures are evidence that consumer confidence is at a ‘record low’.