As the credit crunch brings a tide of economic uncertainty to the retail world, industry figures have warned that this Christmas could prove to be a tight one for stores right across the UK.
Since Christmas involves a number of variable costs – travel, food and alcohol, as well as seasonal expenses such as fuel and heating – the most likely scenario is that consumer spending will be reduced. While for many this will mean reduced overall sales, it could also cause a growth in spending on budget items.
Focus Multimedia’s PR and marketing manager Grant Hughes said: "Shoppers are increasingly focusing on price as the economy continues to slow and household budgets get tighter. There has been a marked migration to the value end of the market, but consumers also recognise value for money and this is something that we always try and inject in to our higher priced products."
Target Component’s managing director Paul Cubbage added: "Food and fuel prices and the tightening of credit, along with a general sense of economic uncertainty, may well see families being a little more cost conscious this year than previously.
"The main impact is likely to be a reduction in demand for bigticket items and more emphasis on a larger quantity of low-cost stocking fillers, and can be hugely beneficial to the savvy retailer with the right type of products in stock."
However, others think that spending, while reduced, may be curbed to different types of product rather than cut off altogether. "We think that most families will feel the need to reign in their spending this year, but Christmas is a special buying time," added Meroncourt’s sales director Steve Walsh.
"Parents may curb what they spend on themselves, but probably not on their children. I’m also sure there will be plenty of other customers who just think that with all the bad economic mood they may as well just blow their money and enjoy themselves."