Prepare for a Christmas season of savvy spending as Mintel’s latest insights reveal a blend of bargains and credit for UK consumers. Anticipated to reach £94.5 billion with a 3.6% YoY increase in total spending across November and December, this growth is primarily driven by inflation. However, Mintel predicts a 2.9% decline in total sales by volume due to reduced discretionary spending.
Financial concerns weigh on over half of consumers (51%), prompting them to stick to a tighter budget this holiday season, while 56% express heightened price scrutiny due to ‘shrinkflation.’ Notably, 28% plan to utilize credit for Christmas spending, up from 22% in 2022.
In a strategic move, 25% of Britons plan to leverage Black Friday promotions for festive gift purchases, indicating a shift in consumer behavior. Nick Carroll, Category Director of Mintel Retail Insights, acknowledges the challenges but sees a well-timed recovery in consumer confidence leading to a potentially lucrative December for retailers.
Carroll notes, «Festive 2023 will be challenging for retailers, but signs of a recovery in confidence are emerging.» With a polarized spending period expected, higher earners contribute to confidence recovery, while lower earners navigate continued financial pressures.
In this climate, value takes precedence, making Black Friday promotions especially enticing. Carroll anticipates a robust Black Friday event, fueled by early deals and widespread retailer engagement.
As consumers seek a balance between festive enjoyment and budget consciousness, the allure of affordable indulgences, particularly in value fashion, is poised to shape the Christmas shopping landscape. Get ready for a season where savvy spending meets seasonal cheer.
