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Retail Economics/Klarna: Pre-Christmas Survey 2019

Shoppers spend over £2bn on Christmas gifts during Black Friday

At a Glance:

  • Shoppers spent an estimated £2.1 billion on Christmas gifts during Black Friday, around 16% of total Christmas spending in the heavily discounted period.
  • More than one in five (22%) shoppers said that they bought Christmas gifts during Black Friday to take advantage of discounts.
  • Of those Black Friday Christmas shoppers, an average of £179 was spent on gifts (almost 40% of the average household Christmas budget).
  • Shoppers focused their attentions on electricals (43%), apparel (42%) and toys and games (29%).
  • However, fewer consumers bought Christmas gifts during Black Friday than had planned. Around 28% of consumer surveyed before Black Friday said that they would buy Christmas gifts, compared to 22% who actually did.
  • In part, this may be because discounts were perceived as worse than last year. Indeed, over a third (36%) of those that shopped for Christmas gifts thought that discounts were worse than last year, with just 19% saying that they were better. Just under a half (45%) thought they were about the same.
  • Disappointment over the level of discounts may also have held back spending. 3 in 5 consumers (60%) said that they spent less than they had originally planned. 22% said that they spent more than planned.
  • In the lead up to Christmas, confidence remains soft. Almost 2 in 5 (38%) said that they are planning to spend less than last year, compared with 16% who said they intend to spend more.

 

Savvy shoppers bring forward Christmas shopping 

Research conducted by Retail Economics and Klarna showed that shoppers spent over £2 billion buying Christmas gifts during the Black Friday period. Indeed, more than one in five (22%) shoppers admitted to taking advantage of Black Friday discounts, making their Christmas budgets stretch further. 

Black Friday Christmas shoppers spent an average of £179 on gifts, which is likely to account for around 40% of the Christmas household budget. 

Overall, it’s estimated that 16% of total Christmas shopping in the UK was conducted over the Black Friday period. In many cases, savvy shoppers pulled forward their Christmas spending which is likely to have come at the detriment of retailers’ margins. 

Spending focused on fewer categories and increasingly online

What’s more, purchases were concentrated online and across electricals (43%), apparel (42%) and toys and games (29%) which is likely to have benefitted fewer retailers that have the capacity to cope with periods of intense demand and sophisticated online propositions.

Interestingly, the 35-44 year old group showed the highest propensity to conduct Christmas shopping during Black Friday with around 45% of respondents buying gifts. While expectations were highest across Gen Zs prior to the event, a third actually bought Christmas gifts compared with just under a half who had originally intended to.

Shoppers hold back as levels of discounts disappoint

However, levels of spending on Christmas gifts were lower than many consumers had expected. Indeed, 60% of Black Friday Christmas shoppers said that they spent less than they had intended before the event (22% said they had spent more) which is likely to have been fuelled by disappointment over the levels of discounting.

Indeed, over a third (36%) said that discounts were worse than last year, with around 19% saying that they thought discounts were better.

What does this mean for Christmas?

Many retailers will be counting the cost of Black Friday as spending was brought forward at the expense of the traditional Christmas build up and at thinner margins. There will be all to play for the in final weeks before Christmas, but shopper sentiment remains fragile amidst a volatile political and economic climate. In fact, 38% of shoppers expect to spend less this Christmas than last year.

Full Results: Retail Economics/Klarna Pre-Christmas Survey 2019

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