Sunday, August 7, 2022
1Christmas gifts latest victims of credit crunch

Christmas gifts latest victims of credit crunch

By Kate Smail

SANTA’S sack may be a little lighter this year – because Scots will be spending significantly less this Christmas.

In the midst of the financial crisis, it has been revealed that we will spend at least 16 per cent less on our celebrations than we did last year.

The belt-tightening means that Scots are no longer the biggest spenders in Britain – a title they kept for three years – spending £709 each during the festive season compared to last year’s £848. 

But things aren’t all bad – they still spend eight per cent more than other parts of Britain, according to the figures released by Deloitte.

And despite the tightwad image, generous Scots are spending 13 per cent more on gifts than the national average of £359.

Instead, they are cutting costs from food and drink bills and socialising.

It is expected that Scots will spend just £165 on their Christmas dinner and all the trimming – £39 less than last year and £5 less than the national average.

In fact the biggest drop in spending comes in the socialising category with more and more people opting to ditch the pub for a night at home.

But with a limit of £137 to spend on partying, Scotland still lives up to the party reputation, spending £10 more than elsewhere in the country.

Jim Boyle, retail partner for Deloitte in Scotland, said: “There is no doubt that falling house prices and rising food, energy and transport costs together with increasing fears in the employment market have impacted on consumer spending for much of 2008.

“And while Christmas is not about to be cancelled, a recession will mean that for the first time in 15 years retailers will face a much thriftier public as consumers become increasingly price sensitive. 

“At this early stage it is far from clear how much of an impact the recent dramatic interest rate cut will have, although it is encouraging for the retail sector that this has largely been passed on to the consumer.”

According to the survey, farmers markets and luxury food outlets can expect to see a big drop in profits, as consumers veer towards more purse friendly options like supermarkets.

And the home entertainment sector is set to prosper, with people turning to karaoke and computer games to add a fun twist to their house parties.

With all regions of the UK expected to curb their spending, there is only one group willing to buck the trend – 16-24 year olds.

Retailers will be delighted to hear many youngsters are actually planning on spending more this Christmas and are happy to worry about the consequences later.

Predictions for Christmas 2009 aren’t filled with festive cheer either – 64 per cent of consumers and 83 per cent of retailers think the economy will have deteriorated even further by next year.

The survey by Deloitte interviewed over 1000 adults ages 16 and over throughout two weekends in August and November.

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