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Consumers cut back on spending amid increased concerns over the economy

UK, 29 November 2011 – More consumers say that they will be cutting back on their Christmas spending in light of the current economic situation compared to last year, according to the GfK Consumer Products and Retail’s Savvy Shopper study.  Over a third of consumers (36 per cent) claim they will be cutting back – ten per cent more compared to last year.

This comes as consumers become increasingly pessimistic that the UK’s economic situation will get worse before it gets better – up 5 per cent from last year – with 69  per cent believing that the crisis with the Euro will have a major impact on the UK economy.

Pam Armstrong, Managing Director of GfK Consumer Products and Retail, says: "GfK’s findings mirror the concerns already expressed by some retailers towards Christmas trading and warnings of tougher conditions on the high street this year.  There’s a big opportunity for retailers to take advantage of other channels such as the lucrative online shopping market, but to be competitive they need to win consumers’ confidence and provide a good customer experience.”  

In fact, the research reveals that there is better news for online retailers as despite bad weather conditions in December 2010 causing  delayed deliveries of gifts and festive goods, one in four (25 per cent) shoppers claim they will shop more online this year than last.  Just under three-quarters (72 per cent) of those surveyed will do some or all of their Christmas shopping online.

Learning from last year, nearly half of consumers are wary of postal problems (42 per cent) or bad weather (38 per cent), and have adapted their behaviour this year and started shopping online earlier than their high street counterparts.  The study shows that 4 out of 10 (40 per cent) of consumers, who will be doing the majority of their Christmas shopping online, started ordering in September and October, while only a minority will leave it until December. 

This is in contrast to those planning to shop mainly in towns or on the high street, who will be carrying out the majority of their shopping in November and December.

The study shows that consumers are enjoying the benefits of  increased ease of use and security when shopping online.  According to the study, four out of ten (40 per cent) agreed that websites are easier to use than they were a year ago, and nearly a third (32 per cent) believe that online shopping security has improved.  In addition, access to better or faster broadband seems likely to have contributed to a better online shopping experience for one third (33 per cent) of consumers.

The economic climate is driving consumers to ensure that they are getting better value and quality for their money.  When it comes to buying food and drink, consumers’ shopping intentions indicate the chain that will miss out most in the festive food fight could be Tesco, as shoppers look to get better value at perceived lower-end stores or move more upmarket for festive treats.  In fact, 23 per cent of consumers that normally shop at Tesco say they will swap to other stores for their Christmas grocery shopping.  Marks & Spencer looks set for a healthy Christmas with a potential year on year uplift in food and drink shopping this year.

Editor’s note: Please source all information to GfK Consumer Products and Retail.

About the survey

The survey was conducted by GfK Consumer Products and Retail, covering 575 consumers in GB, who were interviewed between 26th October and 1st November 2011 using an online methodology.

The GfK Group

The GfK Group offers the fundamental knowledge that industry, retailers, services companies and the media need to make market decisions. It delivers a comprehensive range of information and consultancy services in the three business sectors Custom Research, Retail and Technology and Media. The No. 5 market research organization worldwide operates in more than 100 countries and employs over 11,000 staff. In 2010, the GfK Group’s sales amounted to EUR 1.29 billion. For further information, visit our website: www.gfk.com. Follow us on Twitter: www.twitter.com/gfk_group.