Shoppers to spend ‘£4.4 billion less on non-essentials’ this Christmas period

Shoppers are expected to spend £4.4 billion less on non-essentials – a fall of 22 per cent – in the run-up to Christmas as cost-of-living crisis continues to squeeze spare cash, recent reports stated, also forecasting lower footfalls. 

According to research by Retail Economics with retail technology firm Metapack, almost 60 per cent of shoppers expect to cut back on non-food spending in the so-called “golden quarter”, or last three months of the year when most retailers usually see the maximum sales and reap majority of profits. 

Clothing and footwear retailers, who saw a surge in sales over the summer thanks to the return of socialising and sunshine, are forecasted to be the hardest hit with just over a quarter of consumers looking to cut back in that area. 

About a fifth of shoppers are expecting to cut back on electrical goods, toys and homewares as 38 per cent of shoppers identified themselves as “distressed” and at a high risk from the soaring cost of living and a similar proportion said they were “secure but concerned”. 

Warning that inflation is set to peak at exactly the wrong time for retailers, Richard Lim, the chief executive of Retail Economics, said that shoppers’ budgets are already under intense pressure with inflation reaching decade-highs across international markets.  

“Consumers are concerned, budgets are under pressure, and households are intending to cut back this year as they struggle to make ends meet.

“Against this weakening consumer backdrop, retailers are also facing a pincer movement of rising input and operating costs which is testing business models to breaking point. With profit margins under intense pressure, some retailers are planning to pass on costs through delivery and returns options, precisely the areas that encourage consumers to seek out alternatives.” 

Additionally, nearly a fifth fewer shoppers are expected to be out and about in December this year than pre-pandemic, with numbers only projected to be 4.2 per cent up on last year. October and November are expected to be even worse than last year with numbers down 2.1 per cent and 2.7 per cent, according to Springboard.