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Shopping for Christmas
Christmas 2012: Some Rays of Hope.
Less Bling and More Conviviality
The Centre for Retail Research provides here its independent forecast for the Christmas season 2012, covering offline and online sales, purchases per household and sales per person on gifts .
We expect Christmas 2012 to be slightly better than last year with sales growth averaging 1.3% in real terms. The past 12 months have been quite grim, but we feel that (a) many consumers find their economic prospects are improving, and (b) after four years of recession many families are looking for a 'traditional' family Christmas, perhaps less bling but more conviviality. People are likely to spend more upon decorations and festivities and slightly less on gifts.
Why is Christmas Important? The graph of monthly retail sales (between 2001 and 2012) shows that sales in every January are terrible, then rise through summer to a peak in September, then after a further lull, sales jump by an average of 60% to an annual peak in December.
Christmas is critically important for retailers, November and December account for 21% of annual retail sales. A poor Christmas, as seen in 2008, led to 20 major retailers going into administration, the loss of 40,000 jobs, and shop voids rising to 10% in February 2009.
The Forecast UK
We forecast that Christmas sales in 2012 (the 8 weeks mid-November to the end of December) will rise to £72,168 mn, a rise of 4.5% (at current prices) above last-year's £69,060 mn, but this is equivalent to growth in real terms of only 1.3%.
These figures are based on two 1,000 person surveys of spending intentions in October and November 2012 and discussions with retail businesses.
Total Scottish spending is forecast to be £5,524 mn (+3.6%) over last year's £5,332 mn, a slight fall compared to last year. This is a particular problem in view of the fact that Scotland's Christmas in 2011 was described by the Scottish Retail Consortium as the 'worst ever'.
What Will People Buy?
Consumers told us that because of inflation it would be a struggle to keep spending up, but they would still try. They expected to spend slightly less on gifts and slightly more on food and drink and much more on decorations.
Spending per household
Total spending per household £712.69
|Gifts||61% of spending||£434.74 (-0.6% cp 2011)|
|Food & Drink||29.5% of spending:||£210.24 (+14.1%)|
|Travel||6.0% of spending:||£42.77 (+4.5%)|
|Decorations||3.5% of spending:||£24.94 (+26.0%)|
- Compared to 2011, spending on Gifts is likely to fall slightly from £437.36 to £434.74. However note that around 29% of Gift spending has migrated online, where prices are lower, hence the number of items bought will be approximately the same as last year.
- Spending on Food and Drink will rise from £184.23 to £210.24.
- Spending on Decorations will rise (from £19.79) after a sharp fall last year. This is justified as 'making it more like a traditional Christmas'.
Online Spending at Christmas
We estimate that online spending at Christmas will be £15,880 mn this year (22% of total Christmas spend), an online record.
One-third of online spending will take place on mobile devices, both smart phones and tablets.
The CRR will provide more detailed information here about online spending after it has been published nationally.
What Will be Spent on Gifts?
Spending per head on gifts in 2012 will be £188.68. We expect a slight fall in spending on toys, but a growth in consumer electronics (including, of course, games devices). There will be a rise in spending on cosmetics, perfume and toiletries (possibly caused by the 'lipstick' effect in recession) and a continued fall in spending on clothing/footwear.
|Breakdown of Christmas Gifts per Head