Christmas Shopping Consumer Spending 2014

Christmas Shopping Consumer Spending 2014

Christmas 2014:

Christmas Shopping Consumer Spending, Recovering offline and online sales, purchases per household and sales per person on gifts.

We expect Christmas 2014 in the UK to be better than last year with sales growth of 2.1% compared to last year’s eventual outturn of 0.9%. The improvements in the UK economy and an increase in consumer confidence will help retail spending this Christmas. A significant feature is expected to be the fact many families are looking for a ‘traditional’ family Christmas, perhaps less bling but more conviviality. Nonetheless spending on items like games consoles, tablets and Smartphone is likely to break records. The only European country likely to do better than the UK will be Germany with growth of 3.0% compared to last year.

Why is Christmas Important? The graph of monthly retail sales (between 2001 and 2013) shows that sales in every January are terrible, then rise through summer to a peak in September, then after a further lull, sales jump by an average of 60% to an annual peak in December.

The Forecast UK

We forecast that Christmas sales in 2014 (the 6 weeks mid-November to the end of December) will rise to £72.7 bn, a rise in real terms of 2.1% over last year’s £71.2 bn. Last year, after a good start, retail spending was quite flat at 0.9% growth so retailers will be watching carefully to ensure that customers keep shopping. These figures are based on 1,000 person surveys in the UK, US, Germany and France about spending intentions in October and discussions with retail businesses.

What Will People Buy?

Consumers are anxious about inflation, particularly energy prices. They will spend more on food and drink and decorations, but a smaller rise in gift spending.

Spending per household

Average spending per household £758.35

Gifts 58.3% of spending: £442.40 (1.8% cp 2012)
Food & Drink 28.4% of spending: £215.50 (+2.5%)
Travel 9.8% of spending: £74.36 (+2.1%)
Decorations 3.5% of spending: £26.09 (+4.6%)

Spending on gifts is the biggest item, representing 58.3% of Christmas spending, a small decline in share (-0.2%) compared to 2012.

  • Spending on decorations is to rise by 4.6%, aimed at making the home more ‘Christmassy’. In 2011 it was £19.79.
  • Christmas-related travel now represents almost 10% of Christmas spending.
  • Spending on Food and Drink by 2014 will have risen by 17.0%, reflecting both food price rises as well as an increasing taste for luxury.

Online Spending at Christmas: one-in-five goods bought online

We expect online Christmas spending to break through the 20% barrier, rising to £14.6 billion in 2014 (a rise of 15.8%). The online share of Christmas spending will be 20.1% compared to last year’s 17.7%, meaning that one in five goods will be bought online. UK online retail sales will be higher both in value and as a proportion of all-retail sales than any other country in Europe.

This means that once again, retail sales through shops will fall in absolute terms, this year by -0.9%.

Online Spending at Christmas: Mobile mCommerce growth of 163%

We expect mobile spending (transactions through tablets and smartphones) to grow to £1.29 billion, with tablet sales growing by 538% (reaching 39.3% of mobile sales) and smartphone transactions to grow by 337%. Mobile ecommerce will be used even more widely to check prices and stock. Mobile is the fastest growing element in the most successful part of retailing and 2014 is expected to see the widest use of mobile ecommerce.

Transaction growth outstrips spend as consumers make more smaller payments

Average value of a retail card purchase at a record low

Debit and credit card spending reached £47.8 billion in October but the annual growth rate is slowing, according to the latest figures from The UK Cards Association.

Card spending grew by 6.5 per cent in the year to October, down from a peak of 7.4 per cent in May this year. Figures show that debit cards are the preferred option, with the annual growth rate for debit card spending at 7.5 per cent, almost double that of credit cards at 3.9 per cent.

At the same time the total number of card transactions is growing at the fastest rate, with 1.025 billion purchases.

With transaction growth once again outstripping spending, the average value of a retail card transaction has dropped to a record low of £33.30. This is a reflection of the continuing migration of low value cash payments to cards, along with the increasing use of contactless cards.

Richard Koch, Head of Policy at The UK Cards Association, said:

”While the lowest inflation rate for 12 years and falling petrol prices appear to be slowing the growth in the overall value of card spending, consumers are actually using their cards more frequently than ever. Over three quarters of retail spending is now made via cards, with people opting for their debit cards for smaller payments in particular. ”

The key movements to note are:

  • Retail sector spending rose by £104 million to £23.5 billion, driven by food and drink and household goods.
  • The impact of half-term meant that the biggest increases in card spending between September and October were recorded in concerts and entertainers (up 142 per cent) and cinema, theatre and dance (up 55 per cent). The deadline for paper tax returns on the 31st October resulted in the third highest increase in tax preparation services (up 47 per cent).
  • The debit and credit card share of total retail sales was 75.7 per cent.Bargain hunters expected to cash in on earliest deals this Christmas Day
  • Christmas Day shopping bonanza as online sales start early

Dozens of shops have started their sales early to attract families browsing the internet for bargains on Christmas Day.

Experts are predicting a record spend in shops such as Amazon, John Lewis, House of Fraser, Lakeland, Marks & Spencer and many others, which are offering as much as 70 per cent off some lines online.

The trend to begin online sales on Christmas Eve, rather than the tradition of Boxing Day, came to prominence three years ago in Britain.

As soon as major retailers such as Amazon adopted the practice, it was widely copied by competitors.

Retailers know that families increasingly use iPads, tablets and mobiles while they sit in front of the television or unwrap presents on Christmas Day.

Shops see it as an early window to offload excess stock because, once Christmas Eve arrives, families are be unable to order and collect parcels to wrap up before the festivities begin.

Amazon has predicted a fivefold rise in shopping activity on its website this year as the trend rapidly becomes part of some families’ Christmas Day rituals.

Estimates suggest between 5 per cent and 8 per cent of adults will shop online on Christmas Day. That would indicate that up to four million people will make purchases.

Analysis suggests as much as £441,000 a minute will be spent online, or £636 million throughout the day.

Shoppers will make 142 million visits to retail websites, a 25 per cent increase on last year and a new record, according to data firm Experian and trade body IMRG.

Dominic Trigg, managing director for Europe of digital advertising technology company Rocket Fuel, said: “Shopping online on Christmas Day is now a normal part of UK consumers’ holiday experiences every year.

“It is clear that UK consumers now see shopping from the comfort of their own home, following Christmas Day dinner, as much of a tradition as a turkey and ham dinner.”

Giles Longhurst, Experian general manager of consumer insight, said: “The ease of shopping online via connected devices raises the prospect of a very large amount of shopping activity on Christmas Day itself and we expect a 25 per cent growth on last year in the number of site visits as shoppers slip away from families to do some additional bargain-hunting on the big day.”


Here are a selection of offers at some of the retailers that have announced their discounts:

John Lewis is offering a Bosch Classixx WAE24369GB Washing Machine 7kg at £289, down from £389 – a saving of 25 per cent. It is also offering £200 off a Samsung UE55H6800 Curved LED 55inch Smart TV, now priced at £999.

M&S is offering a women’s Leather Quilted Biker Jacket for £160, down from £249 and a men’s Collection Luxury Jacket for £249, down from £21.50.

Amazon is offering a selection of Kindle books for 99p, including The Girl Who Saved The King of Sweden. Its deals change on a regular basis and it appears already to have sold out of one of its main Christmas Even attractions, the Clogau Gold 9ct Yellow Gold Earrings, which went on sale at £199 down from £500. It is also selling a Maxima Fitness MF-2000-SpeedsterXT tredmill for £844.17 down from £1,899.99. It will launch another batch of deals at 4pm today.

Lakeland is offering a Ceramic Santoku Knife, usually priced at £26.99, for £9.99 – a saving of 63 per cent.

PC World is offering an Apple MacBook Air 13.3″ 8GB model for £849, down from £1,049 and a Samsung Galaxy Tab 3 7” tablet 8GB for £79 down from £139. is launching its first ever Boxing Day sale early at midnight with some hefty discounts. Among them is a Toshiba 48″ Smart Full HD LED 3D Freeview HD TV, which was £699, is now £379, giving a saving of £320. It is also offering a Samsung A-Series Freestanding American Fridge Freezer in gun metal that was £799 but has been reduced to £599.

Laura Ashley is offering up to 50 per cent off its fashion range, with a Fawn Marl Cable Knit Cape priced at £39, down from £65.

Asda is offering small discounts on a many of its alcoholic drinks, including Johnnie Walker Double Black which was £40, now £29.

House of Fraser has a Linea Riva 3 Seater Sofa at £499, down from £999 and a Krups Melody 3 Coffee Maker, priced at £74.99, down from £149.99

Appliances Direct has a number of drones on offer. It is selling Hornet Mini Quadcopter Drone With 6 Axis Gyro and Protect Cover for £24.98, down from £59.98 and the Quadcopter Drone With Camera and Video Recorder 2.4G with 6 Axis Gyro for £39.98, down from £69.97. The latter comes with an integrated camera and video recorder, allowing for full flight recording and a range of 100m.

Debenhams is offering discounts on everything from lingerie to children’s toys. It has a My Friend Cayla doll, one of this year’s most popular gits, for £30, down from £60. It is also advertising a Star by Julien Macdonald grey padded faux fur coat for £49.50, down from £99.






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