NW consumers to cut festive spending

NORTH West consumers are set to rein-in their spending this Christmas – splashing out 16% less than last year – a key survey said today.

The 14th annual Christmas Retail Survey from business advisory firm Deloitte also predicts that middle market retailers will feel the pinch as consumers turn to discount retailers and supermarkets for bargians.

The predicted spending fall in this region was the biggest in the country. Nationally the picture was brighter as  57% of UK consumers said they intended to spend the same this Christmas as they did last year Some 24% of respondents said they will spend less and 19% say they will spend more.

Sean Beech, partner in the consumer business team at Deloitte in the north west , said: “We think the talk of Christmas being cancelled is overplayed.  Whilst total planned spend including socialising may be down, the majority of consumers intend to spend the same as last year. “
 
He said the region’s new-found thrift was down to a “greater dose of reality” among consumers here: “There has been a big fall this year and I think it is because maybe in the past we have been more generous than in other region and now consumers have come back down to earth.”

On average, consumers in the North West are planning to spend £618 on gifts, socialising and food and drink this year.  This is 16% less than last year and when compared to 3% growth the year before could be interpreted as a 19% drop in confidence.

The survey hightlights a growing trend for consumers to cut back on trips out to pubs and bars, which will be unwelcome news to the already beleaguered leisure sector.

Respondents in the North West said they plan to spend an average of £112 on socialising this year, which is down from last year’s figures of £178.

Mr Beech added: “Its all about ‘in-tertainment’ this year where staying in will be the new going out. This trend has come to the fore this Christmas. Non-essential discretionary spend is the first thing to go when people start to feel the pinch. However, this is good news for the grocery sector as people may spend more to entertain at home.”

He said he expects the supermarkets to do well, with non food sales soaring, as shoppers look for bargains. More than  60% of consumers said they will use supermarkets for some of their Christmas gift shopping this year, compared to 52% last year.

“There are always winners and losers in the high street, and I think the middle market will be hard hit, as consumers trade down and turn to supermarkets for value. I belive the retailers at the top end of the market will fare reasonably well.”

He said he hoped last week’s dramatic interest rate cut would boost consumer confidence, and possibly prevent some retailers from going out of business.

More than 1,000 people were interviewed in August and October for the survey.  More than 300 retailers also took part.