Bah humbug: Brands must act now or face frugal Xmas

Brands must adapt now or brace themselves for the most frugal Christmas in a generation, with only a quarter of consumers feeling positive about the festive season and two-fifths worried about affording it at all.

That is the grim prediction revealed in Mindshare UK’s Reality Check report, which quizzed more than 1,000 adults over their feelings towards Christmas this year as the cost-of-living crisis squeezes people’s spending power.

Just a quarter of those asked said they were feeling positive about the festive season – down almost 25% on the same time last year. Meanwhile, the number of people feeling very negative about Christmas (14%) was almost five times higher than this time last year.

For many respondents, this negativity is directly linked to the cost-of-living crisis. Four in ten said they were worried about affording Christmas, while three in ten expected to rely on credit cards more than in previous years. Those in the 35- to 54-year-old group are most likely to be concerned, with over half worried about covering the cost of the festive season.

Despite these worries, people appear keen to make sure their loved ones enjoy Christmas, even if it means making sacrifices themselves.

Two thirds (67%) said they wouldn’t be asking for much this Christmas, 59% want to make sure their kids don’t miss out, while over half (56%) predict they will be spending on loved ones rather than themselves.

And with consumers poised to cut back, brands will need to adapt. When asked where their focus will be this Christmas, 78% said they would prioritise saving over splurging, 79% predicted they will be staying in rather than going out, and 74% say they will be holding back rather than indulging. As with other questions, results remained reasonably consistent regardless of household income.

Even so, there are reasons to be optimistic for brands that manage to resonate with consumers over the festive season.

Mindshare UK. head of research and insights Julia Ayling said: “This Christmas is quite different to anything advertisers will have experienced before. Regardless of financial position, people will behave very differently this Christmas. All brands, even those that have traditionally been fairly recession proof will need to adapt to this.

“The ‘squeezed middle’ are making changes to make sure their loved ones can still enjoy Christmas, this group needs support from brands to spread cost over a longer period, treat their kids and find alternatives and substitutes that celebrate the joy of giving rather being about the monetary value.

“Let’s not forget that a less commercial Christmas can still be a special one. Tapping into the traditional values of Christmas, and what really makes us happy will resonate with the public this festive season.”