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Consumers in the UK are planning to cut back this Christmas as a result of a double whammy of soaring prices and having less money to spend, with the discounters set to benefit from cash-strapped households, according to new research.
Half of consumers said rising prices would see them having to spend more this Christmas while at the same time 59% believed they would have less money overall to spend during the festive period, a Deloitte report on the ‘Golden Quarter’ revealed.
Surveying more than 3,000 UK consumers about their spending intentions for Christmas, 38% of respondents said they would switch to cheaper brands or stores to seek out gifts and, when it comes to Christmas Day dinner, one in three (35%) plan to do at least part of their food shop at a discounter supermarket.
With rising costs adding pressure to budgets, one in ten (11%) intend to purchase gifts either second hand or via reselling platforms this year.
With the retail calendar also fast-approaching large promotional events, such as Black Friday, nearly half (46%) of consumers said they intended to buy more gifts either on sale or discounted this year.
According to Deloitte’s data, 54% of consumers intend to shop for Christmas in November and the first two weeks of December; a period which includes Black Friday.
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “Consumers are entering the festive season with budgets under more pressure this year, and it is not surprising that almost all are considering affordability and adapting their typical Christmas spending habits in one way or another.
“The economic circumstances in which we enter the period has, perhaps inadvertently, fostered a spirit of thrift amongst some consumers who are looking to save money on celebrations this year.”
Morning update
PayPoint has agreed to acquire gifting and engagement company Appreciate Group in a deal worth £83m.
A statement on the London Stock Exchange this morning revealed the transaction will be effected by means of a court-sanctioned scheme of arrangement between Appreciate Group and its relevant shareholders.
Under the terms of the acquisition, Appreciate Group shareholders will be entitled to receive 33p in cash per share and 0.0190 new PayPoint shares.
PayPoint CEO Nick Wiles said the board believed the proposed acquisition provided “a compelling opportunity to acquire a highly complementary business with well-established offerings in prepayment savings and the corporate and consumer gift card and voucher sector”.
“Appreciate Group brings a well-established technology platform, a strong customer base, a network of popular brand partners and significant headroom for growth across the UK consumer and corporate gifting markets, which is valued at more than £8bn in the UK,” he added. “The acquisition will strengthen our digital payments offering and create an enhanced retail proposition across our partner network, including more than 28,000 convenience stores, delivering additional growth opportunities for the enlarged group.”
The FTSE 100 has started the week down 0.1% to 7,324.47pts.
Early risers in food and drink include Virgin Wines, up 4.2% to 61.5p, Devro, up 2.3% to 180p, Marston’s, up 2.1% to 37p, and Hilton Food Group, up 1.5% to 622p.
Fallers include Bakkavor, down 3.3% to 89.9p, Naked Wines, down 2.7% to 110p, PayPoint, down 2.4% to 566p, and Glanbia, down 1.8% to €10.57.
This week in the City
There is plenty going on this week across the sector, starting with the latest monthly Kantar grocery sales figures on Tuesday.
Tomorrow also sees full-year results from Primark, British Sugar and Twinings owner Associated British Foods, a trading update from drinks bottler Coca-Cola HBC, retail sales figures for October from the BRC and KPMG and the latest spending data from Barclaycard.
Wednesday brings the latest look at how the recovery at Marks & Spencer is going with the group’s first-half results.
WH Smith delivers its annual results on Thursday, along with interims from B&M European Value Retail and Tate & Lyle and a trading statement from Domino’s Pizza.
The latest US inflation figures are also released on Thursday, following the country’s mid-term elections on Tuesday.
Pub group and brewer Young & Co publishes its first-half figures on Friday.
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