Consumers intend to cut back on festive groceries, buying gifts, and socialising this Christmas, new research reveals.
Research of more than 2,600 consumers for KPMG UK reveals 53% say their spend on festive groceries will remain the same as last year, but 34% said they will spend less this Christmas. Only 7% said they would spend more, the data shows.
In addition, 35% of consumers said that they will be eating and drinking out less this Christmas – broadly the same amount as those who said they will do the same as last year (36%). Only 3% said they would be eating and drinking out more.
The KPMG data shows the consumers that will be cutting back on groceries, and eating and drinking out, were most commonly aged 35 to 44.
Meanwhile, the data shows 45% of consumers say that their gift buying budget would be the same as last Christmas, but 39% of those polled said that the cost-of-living crisis meant that they would have a smaller budget to buy gifts this year. Only 4% of all the consumers surveyed said they would have more to spend on gifts this Christmas.
Linda Ellett, UK Head of Consumer Markets, Retail and Leisure for KPMG, said: “The upshot of this for retailers is continued competition for shrinking consumer spend and reduced volume and a need to capture audiences via strong campaigns, well targeted promotions and discounting and great customer experience.
“Older consumers told us that they were least likely to have to cut their gift buying budgets – so focus on that group and the presents for kids and grandchildren may be key. Retailers will of course also know that getting people of all ages spending early on Christmas gifts can often mean they end up spending more overall due to the likes of late impulse purchases.”
KPMG’s Consumer Pulse research released at the end of September showed that 39% of consumers say they are buying more promotional or discount items in 2023 and 29% of consumers said that they have switched to shopping at less expensive retailers.