Despite good intentions to spend less this Christmas, new research from Mintel shows that, for some consumers, the seasonal spirit was too much to resist.
In October last year, 41% of adults said they planned to spend less at Christmas than they had done in 2007. But new figures show that only 28% actually managed to do this.
And 31% spent more than they did in 2007, compared to just 19% who had planned to spend more.
“Back in October when the financial crisis was in full swing, people were understandably scared and were being very cautious about their spending,” explained Richard Perks, director of retail and financial research at Mintel.
“But by December things were looking more stable, food and fuel costs had come back down and so had interest rates. Most people were feeling a little more flush than they had in previous months, which would explain the
disregard for their plans. They had the cash and came out and spent it.”
Most additional spending was done by younger consumers: half of the 16 to 24 year olds said they spent more this Christmas than they had done in 2007.
Mintel warns that retail prospects for 2009 are grim. Nevertheless, says Perks: “Although times will be tough, there are still opportunities to be had. Retailers that have a clear idea of who their target market is and can give their customers what they really want, will be ideally placed to ride out the storm and could even gain market share.”