17 January 2011
Major survey reveals fears behind festive sales drop
Fears about the economic situation, rather than heavy snow, were the main reason for a fall in UK consumer spending in the run-up to Christmas.
Four out of ten shoppers said economic uncertainty made them more cautious and contributed to them spending around £245 million less than they did last year, according to a new survey by Intersperience, the international consumer research specialist.
Consumers over the age of 25, who account for the vast majority of retail sales, spent £313 per head, which was £7 per head less than last year. Seven out of ten people said they stuck to their budgets this year, an unusually high proportion.
Paul Hudson, chief executive of Intersperience, said: “Our survey clearly shows that economic confidence had a bigger negative influence on actual Christmas spending than snow. Harsh weather drove more people online but consumers told us even before the snow hit that they would spend less. People feel the financial situation is more negative than last year and that remains a key worry for the retail sector.”
If many high street chains were forced to make downbeat trading statements, there were clear winners in the Christmas spending period which may also point to a more fundamental change in shopping behaviour.
Supermarkets saw higher sales for gifts and took business away from some traditional high street stores. Some of this was attributed to shoppers seeking “one-stop shops” for all their buying needs rather than making multiple trips to the high street in atrocious weather conditions.
However, the scale of the shift is significant. The percentage of consumers buying most of their presents from supermarkets rose to 34% from 31% last year. Conversely, the number buying most of their gifts from high street stores fell to 71%, from 77%.
Paul Hudson said: “The rise of the supermarkets has been relentless over the past five years and has clearly moved beyond just grocery shopping to gift shopping.
“Tesco has done particularly well, with 43% of shoppers we polled buying Christmas gifts there. Sainsbury has done well, too, but it is still playing catch-up to an extent because of the relative amount of floor space it has devoted historically to non-food sales.”
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