Consumers remain conscious of their spending habits post-recession, and this is not exactly helped by Eurozone uncertainties and the Greek financial crisis.
There is a silver lining however, with GfK sharing that UK wage inflations are outpacing price inflations, and that employment opportunities are steady. More than in previous years, consumers are comfortable with their finances, despite the uncertainties mentioned.
How are people preparing to spend?
How these issues transcend into consumer Christmas spending ideas is not exactly simple. Research from Retail Week indicates that more than half of consumers will match their spending of last year, with 20% hinting to exceed it. The same research by Retail Week’s in 2014, suggested that 29% of shoppers were more likely to spend more than the year before; this potentially points towards a drop in the level of Christmas spending.
Not unexpectedly, the national average of Christmas spending is something that fluctuates considerably.
As you might expect, the highest spend is anticipated from the capital, which supports the popular discussion regarding the difference between London and the rest of the country. With a forecasted average of £849 and 30% intending to exceed their 2014 spend, London is sizeably up on the predicted national average of £550.
Figures outside of London paint a distinctly different picture. In the Southwest, for example, projected spending stands at £346, a staggering £500 below London. Here, just 14% of people intend to surpass their previous winter’s outgoings.
Where are they preparing to spend?
With omni-channel selling very much an integral part of shopping, retailers must be intelligent with their offerings and fulfilment services.
This is particularly pertinent when it comes to e-commerce, surfacing as the most popular buying channel for spending at Christmas. Online shopper research shows that 32% of all Christmas budgets are likely to be spent online; this highlights the influence of developments such as click-and-collect, alongside investments committed to IT improvements.
High street footfall is second in the race for most popular buying channel; here consumers will spend 23% of their Christmas budget.
Again, the analysis of regional buying favouritisms will influence the deployment of resources. For instance, the extent of shopping centres and streets in London is expected to influence buyers to spend just 25% of their budget online. This is below the national average of 32%, and far off the 40% figure for e-sales that is forecast for the Welsh.
These figures highlight the need for retailers to have a connected ERP system, able to allocate stock in response to regional shopping preferences.
The battlefield that is the supermarket sector is anticipated to receive 22% of consumer Christmas budget this winter. Ever-changing attitudes towards discounted providers such as Lidl and Aldi have influenced a slight reshuffling of power; 2015 figures show that 76% of consumers are likely to spend some form of their budget in major UK retailers, a number that has fallen from 2014’s 82%.
Aldi and Lidl in particular have seen their efforts to entice affluent shoppers away from the big supermarkets pay dividends, having wrestled market share from the likes of Tesco and Asda.
Chapter 2 in our Christmas Retail Blog Series tackles 'The State of Shopping Habits'. To read, click here.