Britons to spend Â£10.6bn this Christmas.
A report commissioned by ASDA Supermarket:
The following are the key findings of the report.
· The overall predicted spend by Britons in the run up to Christmas is £10.6bn
· We expect households to spend £300million less compared to last year amidst a historic low in consumer confidence and declining spending power. This means that on average each household will spend £399 on Christmas, down from £413 in 2007.
· Despite the overall cut in Christmas spending, households will spend more for food this year on average £105 compared to £97 over Christmas 2007 Consequently, that means households will reduce their spending on big ticket non-food items such as household electronics etc.
Generally, there are two effects which go in opposite directions. Prices, particularly for food and non-alcoholic drinks, have increased since December 2007 driving up the cost of Christmas. And on the other hand, in the face of rising unemployment and declining spending power, households will think twice before spending on big ticket items.
Consumers will need to get the best possible value for money, so that they can have as good a Christmas as before without spending as much.
The report highlights that shoppers aren’t going to cancel Christmas as a result of the credit crunch. Spending this year is estimated to be only 2.6 per cent down on 2007.
Cebr’s research shows that UK consumers will spend £10.6 billion on Christmas 2008, a drop of £278million on last year’s figures. The average family will spend £399 on top of its normal household spend this Christmas. Last year the average was £413.
Andy Clarke ASDA retail director “Although the overall predicted spend is slightly down on last year, retailers still have a lot to play for in the run up to Christmas. The winners will be those that focus on delivering real value for money, those who don’t will lose out."
Doug Mc Williams chief executive cebr says, "Christmas spending in 2008 once again shows the cost pressures that families across Britain face at the moment. On the one hand, elevated food prices mean that for the same money households would have less under the Christmas tree than last year. Additionally, spending over the festive season has a strong discretionary component. With rising unemployment and falling disposable incomes consumers will think twice before spending money on big ticket items such as new computers or household electronics.
“It could be worse though – we expect inflation to contract sharply in the next months providing some relief for hard pressed Christmas shoppers. Furthermore, consumers will continue to benefit from strong price competition among supermarkets. Finally, although it will take some time for the full impact of the Bank of England rate cut to feed through, it may help to prop up battered consumer confidence in the run up to Christmas.”