Despite the ongoing cost-of-living crisis, the age-old ability of UK consumers to put aside economic concerns to celebrate the festive season seems set to continue.
However, UK Christmas gift retailers face challenges due to changing consumer attitudes towards gift buying.
Mintel’s market research indicates that cost-saving and sustainability will be priorities for many Christmas shoppers. There will be a significant opportunity for smaller-ticket, ethically-minded gifts in 2023. Given the need to keep costs down and cut back, the biggest gifting opportunities will be found at the lower-ticket end of the market. Gifts which combine value but don’t sacrifice on sentiment and quality will be highly sought after.
Gifting will remain an important purchase driver in the food and drink market; the gifting market will continue to support demand in many segments of the food and drink market as it enables retailers to inject some excitement into the shopping experience and effectively encourage more visits. However, consumers’ increased price-consciousness will prompt them to trade down to cheaper own-brand options and will also generate competition from consumers creating homemade food and gifts.
The future of the gift industry will also experience the consequences of an ageing population The projected declines in the population of under-10s and 20-34s during 2021-2026 will impact and impede the gifting market size and erode future sales as under-35s and parents are among key buyers of food and/or drink gifts.
According to YouGov’s annual Christmas spending tracker, the biggest expense for Britons at Christmas this year will typically be on presents and gifts (a median figure of £300), followed by food and drink (£100) and socialising (£100).
Average spend per household overall is predicted to be in the region of £570.00-£600.00.
Collectively, UK households spent £15.7 billion on Christmas festivities in 2022, up 7.3% on 2019 and by 3.6% on 2021.
But that Britons are feeling stressed about the cost of the approaching festive season is perhaps unsurprising given more than half (54%) say they’re already falling behind or struggling to keep up with bills and credit commitments, up from 41% last year.
To ensure the impact of Christmas is not as stressful, 34% of people say they save throughout the year to afford gifts, while an additional 41% will dip into existing savings pots to pay for presents and 42% think they’ll spend more than they should this festive season.
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