Consumers intend to spend an average of £428 on Christmas presents and celebrations in 2021, leading to a potential £21 billion total festive spend, reveals a new research by PwC.
The average spend per person last year was £384, and the increased spend this year – nearly 12 per cent increase on 2020 - is driven in part by more people planning to spend Christmas with extended family, the firm noted.
The festive predictions research has also revealed that a quarter of consumers plan to spend more this festive season, with over half of consumers set to buy most of their presents in November. With recent price inflation, people also expect they will need to spend more.
“Christmas this year may not be completely back to normal but consumers are determined to make it a good one and many are prepared to spend up to 20 per cent more than last year,” Lisa Hooker, consumer markets lead at PwC, said.
“Spending habits will be more traditional with a focus on food and drink, Christmas dinner and stocking fillers as opposed to homewares and toys. Concerns over stock availability is also driving a desire to shop early this festive period.”
Following the shift towards online shopping in the past year, the channel is expected to be a big winner again this Christmas, with millennials remaining the most active online shopping age group. The convenience of click and collect services, as more workers return to the office, has also driven online spend.
The research notes that over two thirds (67%) of Christmas spend will be online, edging closer to the 83 per cent online spend over Black Friday, when an estimated £9 billion set to be spent during the shopping event.
“Black Friday is back with a bang and it's clear that there has been a resurgence in the number of people looking to participate in the event, with men spending more and hoping to grab a bargain,” Hooker said.
“Retailers will want to take advantage of the renewed interest in the event, but they will look to balance delighting customers with good value, stock availability and profitability ahead of the important Christmas trading period.”
The first two weeks of December will again be the busiest for Christmas shopping but more than half of consumers will have bought most of their presents by the end of November, earlier than we have seen in previous years. Concerns over stock levels, delivery times and further impacts of Covid are forcing consumers to shop earlier than usual to avoid disappointment, the survey has found.
“We know consumers are looking to spend significantly online - for both Christmas and Black Friday - so retailers need to think about how they can get the best from that scenario,” Hooker commented.
“Early shopping offers retailers the opportunity to reduce delivery costs and pressures, manage demand to reduce the cost of seasonal workers, control pricing to protect margins, and offer certainty of delivery to consumers.”
