New research shared exclusively with Retail Gazette reveals that sixty per cent of British consumers are concerned about their personal finances in the run-up to Christmas.
According to consumer group Lightspeed Research, which surveyed 1,000 respondents, found that 44 per cent of shoppers are finding that their finances do not stretch as far as they used to, while 16 per cent are often short of what they need to pay for bills and other essentials.
Demographically, 18 -54-year-olds are more likely to be worried about money for the festive season than those afed 55-64, with 12 per cent of the younger generation saying they were very worried about making funds stretch compared to just four per cent of the older generation.
Ralph Risk, Marketing Director at Lightspeed, told us: “. It is not a great surprise that a younger generation is feeling the pinch and being more careful.
“It is very interesting to see how the economy is having an effect on people‘s feeling about their financial situation as consumers are feeling that they have to be more careful to some degree.
“There is a feeling, which is probably not a huge surprise, that the economy is making them consider what they are purchasing. Shoppers must keep track of their money more than they have had to in the past.”
Despite the increasing trend among grocers particularly to offer competitive discounting, 70 per cent of respondents admitted to being worried to some degree about the cost of Christmas food and gift shopping.
Of those respondents who voiced concerns, 65 per cent said they will spend less on presents this year while 27 per cent have been saving vouchers and points throughout the year to use during the peak season.
Meanwhile, 26 per cent have been buying gifts throughout the year during sales and promotions while 16 per cent will only be buying presents for children this year.
Risk warned that such offers, though increasing retailers‘ popularity in the short term, may detrimentally effect them in the coming months.
“Discounting is something of a double-edged sword for retailers as they may well set a bad precedent with shoppers always looking for sales rather than spend full price.
“In previous years, sales always came after Christmas and people knew when to expect that; it was part of the Christmas game.
“Suddenly, sales are taking place beforehand which is hugely frustrating for consumers as well as damaging for retailers.
“Retailers must work out what pricing points they want and maintain their position as either an exclusive or mid-range brand.
“It is important to understand what you want to offer in order not to erode brand value.”
For consumers during this busy time, it is important not to allow yourself to be bombarded by the sheer amount of competition, Risk explained. “Shoppers must look at what they are buying and who for. Christmas is a very consumer-orientated aspect and there are a lot of gifts that could be considered optional rather than mandatory. “People should be looking at what their expense is; the commercial aspects of Christmas have gone so far that this is a good opportunity for people to ask if they really need to spend quite so much on presents and go back to what Christmas is about; celebrating the family and enjoying the experience while cutting back and being more thoughtful – which is a good message in life.”
