Shoppers Plan for Christmas Spending Surge

In welcome news for the retail sector, research has shown that shoppers are set to spend more this Christmas than last year. Deloitte’s Consumer Tracker report suggests that the British public are prioritising their spending to allow more for Christmas.

This news comes as a festive surprise to retailers, many of which have suffered with the public’s tightening of purse strings amid a difficult economic landscape. The cost-of-living crisis, rising interest rates, and soaring utility bills have all seen shoppers cut back on all but the essentials.

Deloitte surveyed over 3,100 consumers about their spending habits and asked about their plans over the last three months of the year (Q4). 26% said they planned to spend more during Christmas this year. This is a 7% rise compared to last year when only 19% polled intended to do the same.

There was also a slight rise in those who expect to buy their Christmas shopping in-store rather than online. Half of all those asked plan to visit a shop to buy presents. This figure climbed from a similar 47% in 2022.

Commenting on the findings, Oliver Vernon-Harcourt, Head of Retail at Deloitte said, “the long-term impact of the cost-of-living crisis has suppressed consumer spending power, but it appears as if consumers are still willing to spend more at Christmas by prioritising it over other spending”.

He added that “with more consumers planning to increase their budgets for Christmas, discounters and supermarkets might be the winners during this highly competitive period. However, high street shops will need to work even harder to attract customers to compete with online rivals”.

Deloitte’s report also suggests that retailers’ “expectations will be tempered” due to 29% of those surveyed answering that they plan to spend less over the festive period instead. However, while in isolation that percentage may be disheartening, it’s a significant improvement from the 39% polled in 2022 that intended to be more frugal. This should be cause for celebration for retailers, and hopefully, the beginning of a trend toward the golden quarter recovering some of its lustre.

Deloitte’s Consumer Insight Lead, Celine French saw more reason for festive cheer in their reports, stating that UK consumer confidence grew for a fourth successive quarter. She explained that “consumers have shown a degree of resilience throughout the cost-of-living crisis, adopting recessionary behaviours, such as buying supermarket own-brand goods, to maintain their standard of living and cope with unexpected price rises in the cost of energy, housing and food”.

While it’s undoubtedly good news for retail businesses to hear that customers are planning to up their spending this Christmas, it shouldn’t necessarily be taken as a sign of a permanent upswing. Deloitte’s figures showing that 50% of customers will be buying in-store would imply that shopping during this period is seen as an event for many. With little else on the short-term horizon after December, these figures are unlikely to form a trend, but should be well-received nonetheless.

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