Christmas spending to fall by £3 billion but its boom time for marketplaces.
Consumers in the UK are predicted to spend £3 billion less across the Christmas period this year but online is likely to enjoy a boost as shoppers seek out bargains on budget-friendly online marketplaces.
The ongoing cost-of-living crisis has eaten into many people’s savings, which they accrued during Covid-19, and this is leading to what will be a reduced level of expenditure over the festive period, according to research from ShipEngine and Retail Economics.
As many as 79% of UK consumers stated that they plan to cut back on non-food spending across Black Friday and Christmas – up 9% on last year – with 34% citing inflation and 22% stating a lack of savings as their biggest concerns heading into the peak retail period, which will impact their spending behaviour.
For UK consumers the peak shopping period is likely to be elongated this year as they look to manage their budgets by spreading spending over a longer time-frame. They are the most likely among European consumers to start shopping early this year for Christmas, with the survey showing 40% started shopping before October and 15% started even earlier – with some having been looking for festive goods since August. This compares with 35% of consumers in France intending to be ‘early bird’ shoppers and only 22% in Italy.
This trend is being recognised by retailers, with the research revealing that 25% intend to increase the number of their holiday promotions this year, with the same proportion having launched promotions before October.
Where this looks likely to have most effect will be online because 64% of UK consumers are planning to do the majority of their shopping down this channel. This compares with an average of 57% across the eight European markets surveyed, which itself is up from 49% last year. This highlights how it will very much be an online Christmas this year for most consumers.
The most active part of the online market is set to be the marketplaces where people expect to be able to enjoy the best value for money and to potentially stretch their budgets the furthest. Almost 90% of European consumers plan to shop on these sites, with this rising to 95% in the UK. The predicted strong pull of these marketplaces this Christmas is highlighted by the survey finding that they will account for 50% of all online orders.
Richard Lim, CEO of Retail Economics, says: “The squeeze on incomes has become a war of attrition for many households who have dwindled down their savings as the cost of living crisis drags on. Savvy consumers are using all means necessary to manage their budgets by shifting more of their spending to marketplaces to search for bargains, searching for pre-lived products, and starting their festive shopping earlier to spread the cost.”