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Navigating Christmas Amid Economic Challenges

It’s safe to say there has not been a ‘normal’ Christmas for a while, after successive years impacted by Covid lockdowns and the enduring cost of living crisis. But, while the usual turkey tasting, snow speculating and Home Alone marathons will return in 2023, persistent high inflation rates and stagnant spending power mean Brits will have to continue to adapt.

With Christmas just weeks away, households across the UK are planning ahead to ensure the festive season lives up to expectations. According to the7stars QT, 47% of adults started buying presents in early November. Here’s what else our research this quarter has told us:

Reimagining Black Friday: Historically, Black Friday has provided the chance for self-indulgent consumers to splurge on everything from widescreen TVs to designer denims.

This year, Brits are curbing self-interest and targeting the sales event for Christmas shopping. Nearly a third of adults, including 49% of 18-34s, intend to use Black Friday to hunt for holiday gifts (the7stars QT, Nov 2023).

The Regifting Revolution: We’ve all received ill-fitting socks, but Brits are famous for our sneaky recycling of unwanted gifts. Nevertheless, the stigma now seems to be lifting. Some 80% say they have no problem with second-hand gifts, while 1 in 5 admit they regularly regift presents to others (the7stars Lowdown).

Pre-loved presents remain something of a taboo, with 38% admitting they’d prefer not to know if an item they receive is regifted. However, the data points to a widening trend as more than a fifth (21%) of adults plan to buy more pre-owned or second-hand gifts this Christmas.

Sustainable Switches: While sustainability remains high on the agenda for most, the hunt for value takes priority. With inflation stubbornly high, Christmas shoppers may be dissuaded from seeking eco-friendly gifts if they come with a high price tag.

UK data from Google Trends supports this: in December 2022, searches for ‘sustainable gifts’ were at their lowest point since 2018, a more than 40% drop-off from 2021. This year, the onus is on brands to provide affordable gift options that don’t break the bank – or the planet.

Curb Your Expectations: As Christmas draws near, frugal willpower may falter. According to Forbes, while consumers are expected to cut back, rising prices and the post-pandemic retail bounce-back meant overall retail sales grew in 2022.

According to Steve Sadove at Mastercard, festive spending in 2022 ‘looked different than years past…consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings post-pandemic.’

Buy Now, Pay Next Year: According to Bloomberg, British shoppers are forecast to spend a record amount on credit over Christmas 2023, with spending rising 9% vs. last year. With consumers seeking to spread the cost before cutting back in Q1, brands should seek to offer responsible, flexible payment options to customers to assist with the festive planning.

While hopes of a ‘normal’ Christmas may have to wait for one more year, Brits are hungry for a stress-busting celebration. As the sleigh bells begin to ring and the nights draw in, ‘tis the season for brands to step up and lend a helping hand.