• Consumers to spend an average spend of £428 on Christmas presents and celebrations in 2021 - leading to a £21 billion total festive spend
• A fifth of consumers in Northern Ireland plan to spend more this festive season
An additional £9bn will be spent on Black Friday with consumers looking to treat themselves
• Online retailers to benefit most from peak festive trading but Northern Ireland’s high streets are more popular than other regions
A fifth of festive shoppers in Northern Ireland plan to spend more on presents and celebrations this year than last, according to PwC’s annual retail predictions, with the outlook on the high street better here than in the rest of the UK.
One in 4 consumers in the UK who were surveyed by the professional services firm revealed that they intend on increasing their spending this year, with an average £428 spend per person which is up from £384 in 2020. The hike is consistent across all age groups and regions.
Given the disruptions last year, the increased spend is driven in part by more people planning to spend Christmas with extended family, leading to more gifting opportunities, more celebratory food and drink and more Christmas socialising.
Meanwhile, recent price inflation means people expect they will need to spend more.
Digital investment pays off for retailers
Continuing with the trend seen in recent years, online retailers are set to benefit most from pre-Christmas spending. During the pandemic, retailers in Northern Ireland invested significantly in their online offerings and, according to the NI Retail Consortium, sales increased by 40%. While online shopping in Northern Ireland is the lowest of all regions, it still amounts to almost 60% of pre-Christmas purchases.
The annual retail events of Black Friday and Cyber Monday remain a draw for shoppers. Four out of ten consumers in Northern Ireland are definitely going to buy in this year’s pre-Christmas sales. It’s thought that they’ll continue to be predominantly online phenomenons in the UK, particularly this year with the exit of famous high street brands from high street stores and being bought by online players. The impact of Northern Ireland’s high street voucher scheme may account for the relative strength of high street spending with more people here (41%) intending to go directly to stores in the build-up to Christmas than elsewhere in the UK, with London being the lowest at 30%.
The voucher scheme was extended to December 14th which will further support the high street, with calls for shoppers to use the pre-paid cards locally. At the beginning of November, it’s estimated over £26.5m had already been injected into the local economy.
Spending money on the things that matter most - getting together
Spending increases are greatest in the 18 - 24 age group, up 40% on last year. This group intend to spend £356 per person, up from £254. The survey also found that men are catching up with women when it comes to present budgeting - with a reported increase of 15%, up to £428, only a fraction behind what women plan to spend (£429).
A surprising find is that, despite an influx of ‘pandemic pets’, respondents revealed they plan on spending less on their animals this year. It’s a similar story for toys and homeware which may reflect where spend was focused during the last year. Food and drink in general, then more specifically Christmas dinner, and stocking fillers are where the increases are focused.
David Armstrong, PwC NI Partner, commented:
“It’s good to see confidence increasing once again among consumers who hope to spend much more time with family and friends this Christmas and over the festive period. It’s no surprise therefore that food and drink is where people plan on spending most of their cash and, although our survey says people are cutting how much they spend on pets, they don’t call them puppy eyes for nothing!
“With the impact of the high street voucher, we’ve seen a boost to the fortunes of brick and mortar retailers but the future on the ground will look very different. The Executive’s High Street Task Force is collecting evidence to drive change and it’s positive to see plans for the evolution of Castle Court in Belfast for example, after the loss of Debenhams. The high street must adapt to meet the desire and demands of shoppers, visitors and residents.”
Lisa Hooker, consumer markets lead at PwC, said:
“Black Friday is back with a bang and it's clear that there has been a resurgence in the number of people looking to participate in the event, with men spending more and hoping to grab a bargain.
“Retailers will want to take advantage of the renewed interest in the event, but they will look to balance delighting customers with good value, stock availability and profitability ahead of the important Christmas trading period.
“We know consumers are looking to spend significantly online - for both Christmas and Black Friday - so retailers need to think about how they can get the best from that scenario. Early shopping offers retailers the opportunity to reduce delivery costs and pressures, manage demand to reduce the cost of seasonal workers, control pricing to protect margins, and offer certainty of delivery to consumers.”