Brits head to shops, not online, for Xmas spending spree

Fresh evidence has emerged that more UK consumers are shopping instore than online this Christmas, as spending on gifts and celebrations is expected to rise 5% from £21.6bn to £22.7bn last year.

According to research from CACI, 43% of consumers will mostly shop instore for their festive shopping this year. This has risen 7ppts since 2022.

Only 26% said they will complete most of their shopping online, leaving three-quarters of consumers who will do at least half of their shopping in-store.

Gen Z includes the highest proportion of consumers looking to shop mostly instore (+7ppts vs overall), whereas Gen X is the segment that makes up the highest proportion of people shopping online.

Physical shopping has seen a comeback that few expected since the pandemic and it is clear that good experiences in physical stores are important to shoppers.

The CACI study showed that 36% of people are more likely to make a purchase if they have a positive instore experience, and 19% are influenced to make a purchase from an attractive store.

As for the timing of major shopping sprees, younger consumers are more likely to have it all wrapped up by early November, while Baby Boomers are more likely to continue to shop into mid-December.

And while this is the big season for fashion retailers hoping to sell as much as possible, consumers (especially in more affluent groups) are more focused elsewhere, particularly on buying food and drink to eat at home as well as on socialising.

Naturally, that is also likely to mean they will buy new clothes and beauty products.

In total, 17% of UK consumers say they will be spending more overall on gifts this year, but that number nearly doubles among Gen Z (32%). Just as importantly, being environmentally-friendly is increasingly on the radar for Christmas consumption this year, with all metrics increasing compared to 2023.

In fact, 44% of people will use less wrapping paper to limit their impact on the environment, up 20% from 2023. And 25% will be using decorations they make at home, rather than shop-bought (up 13ppts from 2023). This is higher for younger groups, particularly those aged 25-34 (40%). Still, three-quarters of the population will be using decorations bought in-store.

Meanwhile 45% will aim to buy locally produced goods where possible this Christmas, up 15ppts compared to 2023. This is highest among 25- to 44-year-olds (over 50%) and more affluent groups (54% of the Luxury Lifestyles demographic).

Some 42% also say a brand’s environmental policies and practices will influence the likelihood of purchasing from them this year, compared to 36% in 2023. This is higher among 16- to 34-year-olds, with the 45+ group more likely than average to be uninfluenced by eco concerns.

CACI consumer intelligence Hannah Smith said: “Christmas always brings out feelings of generosity and increasing propensity to spend, but the attitudes of consumers towards it are always shifting. The suggestion is that spending power will hold firm, with 48% of people agreeing that ‘the increased cost of living’ will not impact intended Christmas social plans, and nearly one-in-five (17%) saying that they actually intend to spend more overall on gifts this year.

“The behavioural shift for Christmas 2024 follows the growing trend of previous years: people are leaning towards more in-store shopping and more environmentally-conscious habits. We’ve said it before, but it’s worth reiterating, that brands that can create quality physical retail experiences while championing sustainability will win the festive period.”

Meanwhile, according to research from PwC, average spending per consumer is projected to rise from £416 to £433. These figures surpass the levels seen over the past two years and are comparable with the first post-pandemic festive season in 2021, when total spending hit £21.6bn, with an average of £426 per person.

Younger consumers are leading the charge, with 29% of 18-to 24-year-olds planning to splash out more than last year, followed closely by 25% of those aged 35-44. However, it is the 45-54 age group that takes the top spot as the biggest spenders, with an estimated average of £463 per person.

PwC leader of industry for consumer markets Lisa Hooker commented: “Despite better economic indicators and growing disposable income, consumers have been showing a level of caution across autumn. With the Budget behind us, more certainty on taxes and a desire to make time together more special, we are cautiously optimistic about the outlook.”

Brits head to shops, not online, for Xmas spending spree

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