Irish continue to reduce festive spending but rate of decline slows for Christmas 2012
•Irish continue to reduce festive spending but rate of decline slows for Christmas 2012 •Yet Irish consumers retain title of Europe’s biggest spenders •Digital and social media to play an important role in gift research and comparison •Two thirds of Irish consumers to focus on supporting local economy
The annual Deloitte consumer survey of Christmas spending predicts that Irish consumers will once again be the highest spenders in Europe this festive season. However, the survey finds that for the third year running, Irish consumers plan to spend less this festive season. The annual survey finds that Irish consumers predict that on average they will spend 1.7% less this Christmas. Last year, Irish consumers indicated that they would spend 7.44% less. In 2010, there was a 10.6% reduction planned in spending.
Irish consumers indicated that they intend to spend 2.2% less on gifts and 1.3% less on food and drink. However they do anticipate that they will increase spending on socialising very marginally by 0.3%. Across Europe, consumers have indicated that overall they are likely to spend 0.8% less this Christmas.
The survey, which was carried out in the second and third week in September, predicts that the average spend per household in Ireland will be €965.80, with an average of €499.60 spent on gifts, €288.30 spent on food and drink and €177.90 spent on socialising. The average figure in Europe overall is €590.90.
Consumers in Luxembourg, who are also traditionally big spenders at Christmas, will spend an average of €815.10 per household this Christmas, just behind Swiss consumers who are predicted to have an average spend of €816.60 per household. Once again, the most frugal spenders in Europe this festive season will be those in the Netherlands, who will spend on average €287 per household.
While Irish consumers indicate that their overall spending will fall slightly, the survey findings indicate that Irish consumers are less pessimistic than they were in 2011 in terms of the overall state of the economy. However, sentiment with regards to spending power is mixed – 30% of respondents believe that their spending power in 2013 will deteriorate, 28% believe it will stay the same and 22% believe it will improve.
Commenting on the figures, Richard Howard, Partner, Deloitte said: “Irish consumers have for the third year running indicated that they are going to spend less this festive season, but the rate of decline in spending is abating. Consumers in Ireland are slowly becoming less pessimistic, and this is positive to observe given the importance that consumer sentiment and spending is to the overall economy. In addition, it’s clear that Irish consumers’ desire to celebrate the festivities remains extremely strong!
“However, the measured approach to spending this festive season remains and saving and budgeting remain a key focus for Irish consumers. In fact, while over half of Irish consumers indicated that, similar to last year they will prepare a budget, a further 27% plan to budget more this year.”
Unsurprisingly, price is now the decisive factor for the vast majority of Europeans (92%) when it comes to purchasing decisions. Irish consumers have indicated that they will do the following to ensure their spending is kept in check:
- 44% of Irish consumers will buy more products and gifts that are on sale
- 30% indicate that they will focus more on buying less expensive gifts
- 29% will shop more at less expensive stores
In 2012, Irish consumers plan to make fewer purchases using credit. Over a half of respondents indicated that they plan on reducing their exposure to loans from family, specialised consumer credit loans and credit from retailers this festive season. 42% of consumers plan to use savings for a larger proportion of their purchases than in 2011.
In addition, over a third of those surveyed in Ireland plan to increase their usage of loyalty point schemes. In terms of loyalty schemes, Irish consumers have indicated that their preference is for schemes which earn points offering vouchers to spend in the store (24%) or with several retailers (24%). There is also a strong preference for immediate discounts (23%).
However, despite keeping a close watch on their Christmas budgets, Irish consumers will remain generous at Christmas – just 16% said they would focus more on buying for fewer people.
Irish consumers are also more likely in 2012 to support the local economy, with 65% indicating that they will buy locally made products, up from 58% in 2011.
The main reasons identified for spending less this festive season are, unsurprisingly, the economic downturn (57%), the impact of tax on their income (40%) and debt (27%). As in previous years, for those Irish consumers that indicated they will spend more over the festive period, the main reason to do so is to enjoy themselves and avoid thinking about the economic situation. Just over one quarter cited a promotion as a reason to spend more.
This year the survey identified the ways in which Irish consumers search, compare and buy products. 43% of respondents indicated that they use both websites and stores for searching for products and 55% use both for comparing products. In terms of buying products, 72% of respondents indicated that they will buy in-store, while 28% will use both e-commerce and m-commerce methods of purchasing.
In terms of using a mobile phone to buy a product, a quarter of Irish consumers have indicated that they have already done so, while nearly a half (47%) indicated that they will do so in the future. Payment security was identified as the biggest deterrent to purchasing gifts via mobile phones.
Of those Irish consumers who indicated that they will be using social media, 64% will do so to find discounts, 61% will do so to read reviews and 51% will do so to research gift ideas.
“Once again this year, the importance of a multi-channel strategy in targeting customers is highlighted in the findings. When asked what retailers should invest in to improve their shopping experience, the top three areas identified by Irish consumers were lower prices, customer relationship and e-commerce for ease of comparability.”
For those Irish consumers that do intend to buy gifts in stores, the most favoured options are speciality chains (32%), hypermarkets or supermarkets (30%) and traditional department stores (18%). With regards to food the top three locations of choice are hypermarket sized shops (80%), hard discount shops (38%) and traditional food shops (32%). The survey also finds that consumers have a preference for retailer brand labels in hypermarkets.
The survey shows that Irish consumers will do the majority of their Christmas shopping before the end of November (44%), while a further 34% will do their shopping in the first two weeks of December.
As in 2011, books and cash are the most wanted Christmas gifts amongst European adults. While books remain the top choice in Ireland, for 47% of Europeans the most desired gift is cash, and this is now the preferred choice in 15 of the countries surveyed. Amongst Irish consumers, gift vouchers have fallen in popularity to fifth spot from third place in 2011.
The top 10 most wished for adult gifts in Ireland are:
- Books (46%)
- Cash (37%)
- Clothes/shoes (35%)
- Cosmetics/perfumes (35%)
- Gift vouchers (33%)
- CDs (31%)
- DVD/Blu Ray (29%)
- Chocolates (26%)
- Beauty care, massage, spa treatment (26%)
- Jewellery/watch (26%)
It is interesting to note that while cash remains the most desired gift amongst 18-24 year olds, those aged between 55-64 prefer to receive books.
The top 3 adult gifts most likely to be purchased are:
- Books (46%)
- Gift vouchers (35%)
- Cosmetics/perfumes (35%)
Half of all spending on Christmas gifts is allocated to children, and Irish consumers are consistent with their European counterparts in this regard. When purchasing gifts for the under 12s this year, games (38%) are the most favoured option by Irish consumers, followed by books (37%); arts and crafts (28%) and action toys (28%). With regards to buying for teenagers, games are the preferred option, as identified by 34%. This is followed by CDs (27%), books (27%) and cash (23%).
For further information on the survey and to view a copy of the report please visit:
Notes to editors
In order to get a comprehensive view of spending, the survey asks questions regarding what percentage increase/decrease consumers believe they will spend in addition to further questions on how much they believe they will spend. In value terms, Irish consumers have indicated that they will be spending the highest average per household across the countries surveyed. This allows us to both get a feel for the cost of Christmas, but also whether consumers are planning to spend more or less. In this year’s survey, we surveyed participants on their spend on 2011 festivities, in addition to their anticipated spend in 2012.
About the research
This is the eleventh year Ireland has participated in the Deloitte Annual Christmas Spending survey. This year’s survey was performed during the second and third week in September. Respondents are aged 18 years and older. Information has been collected via internet, with a structured questionnaire for a sample of individuals, within controlled panels. Each consumer in the panel is identified through the following dimensions: socio-demographic, personal interests and consumer behaviour. The survey was carried out in 18 countries from Western Europe, Eastern Europe, and in South Africa. The sample size in Ireland was 766.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ie/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
The information contained in this press release is correct at the time of going to press.
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