November 19 2006

Christmas spend forecast to be highest for 12 years

The amount we each spend on Christmas presents this year is expected to rise by 22% over the amount that UK consumers spent in 2005, according to a survey by business advisers Deloitte. Total spending is forecast to reach £16.9bn - the highest level for 12 years. The £7bn that will be spent online this Christmas (as forecast by IMRG) would account for 41% of this. If these figures turn out to be the reality this Christmas then online retailers will be partying in the new year.

The annual Christmas Retail Survey (note - it's a pdf) predicts that we will each spend an average of £378 on gifts this year but spend less money on socialising. The Welsh will be the highest spenders for the second year in a row, spending £731.

"Gift retailers can look forward to a bumper year," said Tarlok Teji, UK head of retail at Deloitte. "Expenditure this year on food and drink will be flat and grocery retailers may need to pull out all the stops to attract more customers."

So what are we buying? According the survey, not surprisingly, we will be buying more expensive gifts than those favoured last year. Gift vouchers, clothes, jewellery and MP3 players are all top of the wish lists for Christmas presents. The growth in experiences rather than physical presents is also shown by the rankings with tickets for sporting events and concerts appearing high up in the lists. Books and DVDs are not as popular this Christmas as other years (but I'm sure there will still be plenty bought by elder siblings not knowing what else to buy for distant relatives).

Last year, jewellery and trinkets were by far and away one of the most popular items for women, but this year it looks like jewellery is firmly on the shopping lists of both men and women. Of the 16-24 year olds surveyed, 58% said that they are likely to buy an item of jewellery this year - the national average is 49% and both men and women will be buying.

Although Deloitte's survey didn't ask people whether they would be shopping online, it forms an interesting comparison on what is happening in the high street, compared to multi-channel retailing and pure play. The highest spenders amongst those surveyed are also those likely to be doing a lot of their Christmas shop online. The 16-24 year olds will increase their spending by 32% to £635 per person, whilst the 25-34 age group will each spend £806.

Emma Herrod