UK consumers rein in Christmas spending plans

Forecasts around key seasonal spending — especially Christmas — can be wide of the mark, but regardless of how the Golden Quarter eventually turns out, the predictions at present are gloomy for the UK.

This year’s study from ShipEngine and Retail Economics — which have a good track record of accuracy — expects UK households to have billions of pounds less to spend on celebrating Christmas than they did a year ago as inflation impacts their discretionary income.

The researchers said this will come through in various ways such as starting Christmas shopping shopping early both to spread the costs and to bag some bargains.

And consumers are also more likely to shop via online marketplaces, despite the healthy bounceback of physical stores this year.

Spending is expected to hit £17.9 billion via online marketplaces during the Black Friday period and December. And across international markets (the Peak Season Report 2023 also looked at the US, Germany, France, Spain, Italy, Canada, and Australia), online marketplaces should account for nearly £202 billion in sales.

The study said as many as 79% of UK consumers will reduce non-food spending, 9%higher than last year, with 34% blaming inflation and 22% saying it’s because they have few or no savings.

Some 40% of consumers had planned to start their Christmas shopping before October and a quarter of retailers reacted to this with plans to launch promotions before October. A similar number plan to increase holiday promotions overall.

As many as 57% of consumers globally plan to do most or all of their festive shopping online. And while that reflects a move towards festive shopping online that has been seen for quite a few years, the figure was only 49% a year ago. And in the Uk that 57% is dwarfed by the 64% planning to shop online.

Meanwhile 90% globally will visit online marketplaces in particular, but 95% in Britain will do so. The reasons include a perception of better value and the ability to compare both products and prices. In the UK, 71% of consumers also think they get faster and more reliable delivery from such marketplaces.