While predictions about seasonal spending can often miss the mark, the current outlook for the UK paints a cautious picture, particularly concerning the upcoming Christmas season.
A comprehensive study conducted by ShipEngine and Retail Economics, known for their reliable accuracy, sheds light on this situation. The study anticipates that UK households will have considerably less to spend on Christmas celebrations compared to the previous year due to the impact of inflation on discretionary income.
This financial constraint is expected to manifest in various ways, with consumers opting to commence their Christmas shopping earlier than usual. This not only helps in distributing the financial burden but also provides an opportunity to secure early bargains.
Despite the noticeable resurgence of physical stores this year, the study suggests that consumers are increasingly inclined to shop through online marketplaces. During the Black Friday period and December, spending via online marketplaces is projected to reach an impressive £17.9 billion. This trend isn’t limited to the UK alone; the Peak Season Report 2023 analyzed several international markets, including the US, Germany, France, Spain, Italy, Canada, and Australia, revealing that online marketplaces are set to account for a substantial £202 billion in sales.
The study also indicates that an astounding 79% of UK consumers are planning to curtail non-food spending, representing a 9% increase from the previous year. Among those reducing spending, 34% attribute it to inflation, while 22% cite a lack of savings as the primary reason.
Notably, 40% of consumers had already planned to kickstart their Christmas shopping before October. In response to this early shopping trend, 25% of retailers are gearing up to launch promotions ahead of schedule, with a similar number planning to ramp up holiday promotions overall.
A global shift towards online shopping for festive purchases is evident, with 57% of consumers worldwide intending to complete most or all of their festive shopping online. This marks an increase from 49% the previous year. In the UK, this trend is even more pronounced, with a substantial 64% planning to shop online.
Furthermore, a noteworthy 90% of consumers globally are expected to visit online marketplaces, with an even higher percentage of 95% in the UK. The motivations behind this preference include the perception of better value and the ability to compare products and prices. Notably, 71% of UK consumers also believe they receive faster and more reliable delivery when shopping through these marketplaces.
As the festive season approaches, UK consumers are navigating the terrain of inflation and budget constraints with a blend of early shopping strategies and a preference for online marketplaces, all while seeking the best value for their holiday purchases.
