Despite a fairly stagnant economy, UK retailers can look forward to a slightly higher level of gift spending from consumers this year with a rise of just under 2%, according to Webloyalty’s 2016 report on UK Christmas Trends. Overall, shoppers are expected to spend £16.7 billion this Christmas with many opting for online solutions. On average, it will take consumers 9.7 hours to spend their overall budget of £459, which is divided among gifts and groceries.
Nearest and dearest still main recipients of Christmas gifts
Unsurprisingly perhaps, children, partners, parents, family at large and friends will be the main recipients of the £9.5 billion spent on gifts this year.
Overall, Christmas spending is on the rise again in 2016 but the increase will be more modest at just under 2% compared to 2.5% in 2015. Spending will go up across the board with a growth of 1.8% for gifts, 1.4% for food and drink (compared to 0.4% last year) and a slight increase of 0.7% for seasonal non-food.
Online shopping continues to grow
UK retailers are slowly reaping the benefits of their investments in multichannels and touchpoints to accommodate consumers’ busy lifestyles. More than 33% of consumers say they plan to do a majority or all of their shopping online this festive season with an additional 32% indicating they’ll buy half their gifts that way. A decreasing number of consumers (less than 15%) prefer buying all their gifts in store.
The increasing popularity of online shopping may be due in part to consumers’ long list of bugbears when it comes to Christmas shopping on the high street. When asked what they hated the most about the experience, people put crowds at the very top (66%) with long queues closely behind (62%). A majority (52%) also mentioned the lack of available stock while almost 34% were put off by the Christmas music on repeat.
Digital and virtual gifts, a solution of convenience
Of the 19% of consumers who are planning to buy digital gifts this year, about 60% are doing it because they’re not sure what else to get and for the convenience. Another 30% feel digital and virtual gift buying allows them to leave it to the last minute while 27% feel the gifts will be more useful this way.
Among the different types of gifts in this category, the most popular is digital money gifts (16%) such as vouchers and gift cards, followed by subscriptions (10.5%) to various streaming services and digital products. Virtual gifts such as credits or virtual money for games or app-based games remain low at 1.5% of purchase intentions.
While there are a lot of advantages to digital and virtual gifts for the giver, a majority of the recipients (55%) feel they’re not as fun to receive as physical gifts, while almost half don’t mind as long as they receive physical gifts as well.
Online grocery shopping rising rapidly
For 28% of UK consumers, buying food for the holiday season remains something they prefer to do in person perhaps because they want to ensure they add their personal touch to the things they plan to serve on that special occasion.
That said with more and more food retailers offering online services and convenient apps, it’s not surprising to see a rise of almost 25% in the number of people set to shop online for groceries this Christmas with more than 10% planning to purchase all their groceries online. The appearance of Amazon as a grocery option in London is another sign of the rise of online food shopping.
In the end, the majority of consumers (almost 34%) plan to use a mix of in-store and online shopping to get their groceries for the holidays. On average consumers will spend £159 on groceries for a grand total around £5.36 billion spent on food and drink.
Tesco will remain the most popular food retailer again this year earning the favour of 36% of consumers (up 1.6%). Sainsbury’s, Aldi and Marks & Spencer round up the top four most popular food retailers with M&S seeing an increase of 3.6% in consumers’ intentions. However, it’s discounter Lidl who is set to make the most gains with an increase of 3.9%.
Despite a more subdued increase in the overall amount consumers plan to spend this Christmas, UK retailers can still expect a merry holiday season this year according to Webloyalty’s 2016 report on UK Christmas Trends. Retailers should see the rise in online spending as a confirmation that they invested wisely in the last few years. All and all, they should look positively on the close of an eventful year and raise their glass to celebrate the New Year!