Celebrating Christmas in the Cost of Living Crisis

Mark Ursell, CEO of QuMind shares QuMind’s survey findings for this year’s Christmas Shopping.

British consumers are expecting Christmas to look very different this year.

Our latest research of 1,000 British consumers that celebrate Christmas found that the majority are already worrying about spending this year (80%), with the majority of Brits expecting their spending will be directly impacted by the cost-of-living crisis (84%), rising inflation (82%), and increasing fuel costs (72%).

The sobering findings found that more than half of Brits believe they will struggle to keep their homes warm over the period (52%) and that they will not be able to buy as many presents (56%) as last year. One third (31%) expect they won’t be able to have a real Christmas tree.

Rolling Back on Spending

Spending will fall significantly as a result. As many as 60% of Brits expect to spend less on Christmas this year, with this group expecting to reduce spending by an average of 30% on last year. One in 10 (11%) anticipate they will reduce their Christmas spending by 50% or more compared to last year. 

This will have a serious impact on the retail and FMCG industries, where many companies rely on the higher volume of sales in the holiday season. Luxury and consumer goods will be particularly hard hit, with half of all Brits predicting to spend less this year on consumer technology (55%), fashion (54%), jewellery (54%) and beauty products (50%).

Food and drink purchases will also be impacted. 51% of Brits expect to spend less on alcohol and 39% expect to spend less on food than last Christmas. Supermarkets will have the upper hand in this market; one-third (33%) of Brits will buy supermarket brands over branded goods and 24% will opt for supermarkets over smaller local stores.

Understanding your Customers

It is more important in precarious times to understand what the impact will be on consumer behaviour. We found that where people shop will change; 36% will do more shopping online to compare prices and 32% will shop in cheaper stores or discount outlets. And when; 17% of Brits have already started and a further 26% report they will start shopping for Christmas from September to give themselves more time to find bargains.

But it’s not just about understanding how their behaviour is changing. As competition heightens with spending decreasing, brands and retailers need to understand what different services and offerings will be more attractive to consumers.

We asked and found that Brits would like brands and retailers to:

• Freeze prices on non-branded products – 49%
• Offer more loyalty rewards to make items more affordable – 46%
• Notify them ahead of any sales of discounts – 42%
• Provide free delivery or collection services – 41%

Retailers and brands need to sit up and listen to what consumers want and need from them in the run up to the Christmas period. Armed with this understanding, retailers and brands can make the right decisions for their customers and their businesses during what will be a make-or-break period for many. The holiday period should be a time of celebration and it is not too late for retailers and brands to help make that happen.