Spending set to decline again this Christmas

The annual Deloitte consumer survey of Christmas spending predicts that Irish consumers will once again be the highest spenders in Europe this festive season, despite the fact that the average spend per household in Ireland will be €943, down from €1,020 in 2010 and a reduction of €411 since 2008. Over the last two years, shoppers in Luxembourg had overtaken the Irish in terms of spending. Consumers in Luxembourg will spend on average €923 per household. The most frugal spenders in Europe this festive season will be those in the Netherlands, who will spend on average €260 per household. The survey, which was carried out in the second and third week in September, shows that of the average spend in Ireland this festive season, €520 will be spent on gifts, €258 will be spent on food, and €165 will be spent on socialising. This year, Irish consumers are predicting that they will spend 9.5 per cent less on gifts, 5.5 per cent less on food and nearly four per cent less on socialising. Overall spending amongst Irish consumers continues to fall, with consumers indicating that they will spend in total 7.44 per cent less this year. Richard Howard, partner with Deloitte, said: "Following a steep decline of 10.6 per cent in spending last year, it's encouraging for retailers that the drop in spend is not as significant as last year, and it's interesting to see that Irish consumers have regained the crown of top spenders in Europe. Through the last number of years, it has been abundantly clear that, despite the fiscal pressures they face, the desire to embrace Christmas and enjoy the festivities has remained strong." He added that the prudency and increased frugality observed in previous years remains a feature of Irish spending - 59 per cent of respondents identified the main reason for spending less is the economic downturn and the belief that it will get worse. Some 33 per cent indicated it was because they are in debt. "It's interesting to note that over three-quarters of Irish respondents believe that the economy is in recession, which highlights how the negativity of the past few years have pervaded the mindset and behaviour of Irish consumers - the Irish economy has, in fact, achieved moderate growth in 2011. However, this is not affecting consumer behaviour or sentiment," added Mr Howard. Once again, utility, durability and value for money will be important considerations for Irish consumers when buying gifts this year. Of particular note for retailers is the fact that Irish consumers will increasingly be using loyalty points schemes this year. In addition to the 42 per cent of respondents who indicated that they will be using these to the same degree as last year, 39 per cent indicated they would increase their usage. Once again this year, for those Irish consumers who 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!