Despite rising interest rates, a slowing housing market and the recent credit crunch, retail experts at Mintel predict that this December could still be filled with Christmas cheer.
It looks like British shoppers will again find the money to have a good Christmas and simply relegate sorting out any financial difficulties to their New Year's resolutions list.
Overall, Mintel estimates that retail sales this Christmas will be up by between 2% and 3% on 2006 figures. Meanwhile, the exclusive consumer research shows that one in three Brits (32%) say that although money is tighter this year, they will splash out for Christmas.
Director of retail research at Mintel, Richard Perks, said, "During 2007 overall spending has slowed down, but our research shows that confidence is still remarkably strong. The signs are that nothing is going to come between British shoppers and having a good Christmas this year."
"Low unemployment means people feel secure about their jobs and their monthly pay cheques.”
He added, “This, combined with the fact that the impact of rising interest rates on predominantly fixed rate mortgages will take another year and a half or so to work through, means British consumers are not yet ready to tighten the purse strings."
The growth in Internet usage has been dramatic, with over half (52%) of households now having broadband access. British consumers are used to going online and for a growing number, it is the preferred way to buy Christmas presents.
Mintel's consumer research shows that two in five adults (38%) will use the internet to buy a few Christmas gifts this year, while one in ten (9%) will use it to buy most of them.
"Consumers want to use the Internet. If retailers don't operate a transactional website along side their shops and catalogues, then they will lose business this Christmas," comments Richard Perks.
But it may not be all good news for retailers as an element of caution may well be creeping in. Those who claim to have a budget they will stick to has risen from fewer than two in five (39%) in 2002 to nearer half (46%) this year.
What is more, some one in five (22%) adults expect to spend less this Christmas than they did last, compared to just 18% back in 2002, suggesting that consumer confidence is not as strong as it was around Christmas time five years ago.
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