Christmas spending plans in 2020
47% of consumers expect to spend less overall on Christmas this year compared to last.
Consumers expect to spend less on activities impacted directly by restrictions such as hospitality and travel, but many also expect to reduce spending on other areas such as gifts.
62% of consumers expect to do more of their Christmas shopping online this year
Those whose finances have been damaged by the crisis are more likely to expect reduced spending this Christmas, but even those who are better off are planning to spend less.
Many consumers plan a lower-key Christmas
Consumers face a different Christmas period this year, with inevitable restrictions on many activities and gatherings of different households. Whilst the rules to be in place over the Christmas period were uncertain when this survey was fielded, we wanted to explore consumers’ spending intentions this Christmas, at a time when many would usually be planning their Christmas shopping and events. Since fieldwork, some of the rules to be in place over the Christmas period have been announced. These include a limited period of time when households can mix, but still significantly limit activities that would usually take place over the festive season.
Our data indicates that many consumers are planning low-key Christmases this year. Nearly half (47%) of consumers expect to spend less overall on Christmas this year. Just over a third (35%) expect to spend the same amount and just 14% expect to spend more.
Unsurprisingly, the majority (63%) of consumers expect to spend less on activities such as visiting pubs and restaurants and attending events compared to last year. Half (52%) of consumers also expect to spend less on travel, whether that be going on holiday or simply visiting friends and family.
However, the figures give no indication that this reduction will be compensated for by greater spending on other things as a significant minority of consumers also intend to spend less in areas that are less directly impacted by covid restriction. 38% of consumers said they expect to spend less on gifts this year compared to last, 45% said they expect no change and just 12% expect to spend more. A quarter (26%) expect to spend more on buying food and drink to have at home this year, but the same proportion expect to spend less, and a plurality (45%) expect no change.
In addition to the amount of money spent this year, consumers also expect a change in the mode of their Christmas shopping. With non-essential shops having been subject to opening restrictions in many parts of the UK, the majority of consumers (62%) expect to do more shopping online this year.
The expectations of reduced spending coupled with an intention to shop more online, is worrying for high-street retailers. If consumers do what they say they will then the high street is likely to have a reduced share of an already smaller Christmas spend.
Regardless of how covid has affected household finances, reduced Christmas spending is expected
A plurality (46%) of consumers reported that, balancing the impacts on income and expenditure, the pandemic has not made their household financial situation either better or worse. Two-fifths (39%) said their situation was worse, and 13% said it was better as a result of the crisis.
This varied somewhat among different groups of consumers. For example, homeowners were more likely to be better off due to the crisis (15%) compared to renters (10%). 20% of those in the highest occupational social grade, AB, reported being better off due to the crisis. This is significantly higher than the 8% who said this in the lowest occupational social grade, DE. Furthermore, the large majority of workers in the furloughed group (68%) reported being worse off due to the crisis, compared to 33% of those working full time and 44% of those working part time.
Almost two-thirds (64%) of consumers who said that they are worse off because of the crisis expect to spend less this Christmas compared to last, at 64%. However, even among those whose financial situation is unaffected or better, more expect to spend less this Christmas than to spend more. Of those whose financial circumstances have improved, 37% said they would spend less and only 28% said they would spend more.
The results suggest that, overall, consumers expect to reduce spending as a result of the pandemic, whether or not this is forced by a deterioration in the household’s financial situation.
The fieldwork was conducted by Populus on behalf of Which? between 18th and 20th November 2020. A sample of 2,094 consumers was surveyed and weighted to be nationally representative according to a range of demographic characteristics.
If you have any questions or would like to find out more, please email Sophie Beesley at email@example.com