There may still be nearly five months until Christmas Day – and 151 sleeps – but it seems the old age of “forewarned is forearmed” could be more relevant than ever this year, with almost two thirds of UK adults planning to cut back their festive spending in 2023 due to the cost of living crisis.
So says a new survey of 2,000 UK adults, Christmas Amidst the Crunch 2, commissioned by the IPA and carried out by Opinium.
It shows that while 64% of all Brits will be slashing their spending compared to last year, this figure is particularly pronounced for the younger generations, aged 18 to 24, with 82% of them planning Christmas cutbacks, and for all adult women, at 68% compared to all adult men at 60%.
The hospitality sector looks set to be particularly impacted by these moves, with almost a quarter (24%) of all consumers stating that they will be reducing their spend on meals out and almost a fifth (19%) reducing their visits to bars and clubs.
Meanwhile, 23% have said they will be reducing their spend on new clothes; 21% will be cutting back on presents for extended family and 20% say they will scale back their spend on premium groceries/drinks (branded, luxury ranges).
Nearly half (48%) of Brits stated that they will be using their savings to finance this year’s Christmas spend, rising to 58% of 18 to 24s. A further 13% of all adults intend to use credit to pay for festive shopping, rising to 17% of 35 to 54s, while 10% will be using “Buy Now, Pay Later” schemes, rising to almost double that (19%) for 25 to 34s.
Consumers will also be hunting for bargains, with over half of UK adults (51%) intending to spend during Black Friday and a third (33%) looking to spend up to a quarter of their Christmas shopping budget during this time.
This figure is considerably higher for the 18 to 24 age-range, with 79% intending to shop during Black Friday and 43% intending to spend up to a quarter of their Christmas budgets then. In addition, nearly a quarter of all adults (22%) and 50% of 18 to 24s are planning on taking part in Boxing Day and January sales.
With the cost of living crisis still raging, there is an increasing acceptance of secondhand gifting for Christmas this year, according to the survey. Two-thirds of all adults (67%) state that they would be happy to receive a secondhand or refurbished gift, with the most popular options being books (34%), jewellery (21%) and clothes (20%).
In addition, half of people would consider giving a secondhand or refurbished gift to an adult (49%) or child (51%). Key considerations when giving secondhand or refurbished gifts are affordability (47%), a greater chance of a bargain (35%), sustainability (33%) and the proceeds going to a good cause (31%).
In terms of pointers for brands, Christmas Amidst the Crunch 2, reveals that almost a third (31%) of UK adults say they are more likely to do Christmas shopping with brands and retailers that prioritise sustainability, rising to 51% among those aged 18 to 34, while half (50%) are open to purchasing Christmas gifts from new and emerging brands.
In addition, around a third (31%) are open to using AI for Christmas gifting ideas this year, rising to over half (51%) in the 18 to 34 age group.
In terms of the communications from brands around Christmas, most consumers want them to be festive (37%), funny (21%), nostalgic (20%) and value focused (20%). In addition, nearly half (46%) of consumers want to see Christmas advertising that reminds them of better times.
Commenting on the findings, IPA senior insight manager Jamie Britton said: “This survey reveals the true impact that the prolonged cost of living crisis, coupled with rising interest rates, is having on consumers’ spending plans.
“It is particularly significant here, given that the Christmas season is known to be the season for giving. To navigate this tough environment, brands must pay attention to these consumer intentions and ensure they are gauging and appealing to the mood of the nation in both their advertising and their seasonal offerings.”
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