Christmas spending set to fall by more than 20%

Irish consumers will spend on average 22% less this Christmas, according to the annual Deloitte consumer survey of Christmas spending.

Ireland, which has traditionally been the biggest Christmas spender, falls to second place in the European spending table behind Luxembourg.

The survey, which was carried out in September and October, shows that the average spend per household in Ireland this festive season will be €1,110.

Of this, €660 will be spent on gifts, €265 will be spent on food, and €185 spent on socialising. This year, Irish consumers advised that they would spend nearly 30% less on gifts, 6% less on food and nearly 22% less on socialising.

When questioned on the economic outlook, Irish people remain pessimistic. This is in contrast to the rest of Western Europe where pessimism is waning.

In fact, in Ireland 86% of people still believe the economy is in recession with Irish women the most pessimistic of the sexes.

Looking ahead into 2010, opinion is divided with 38% believing the economy will improve while the same percentage argue that it will deteriorate.

A significant 93% of Irish people believe that the Government has not reacted properly to the financial crisis or has not taken the appropriate measures to address the situation.

However, no other European government received a 50% satisfaction rating.

The survey also found that 60% of people believe their personal financial situation has been impacted by the economic downturn.

A total of 40% feel secure about their employment compared with 45% last year (25% of respondents are not in employment), and 35% believe their household’s financial position will deteriorate in the next 12 months.

Commenting on the figures, Susan Birrell, consumer business partner, Deloitte said: "There can be little doubt that Christmas in Ireland has finally become a victim of the recession. It’s clear that a strong feeling of anxiety prevails, and is sharply constraining the propensity to consume.

"A total of 74% of people have said that they have less to spend and 61% of Irish people will prepare a budget for their Christmas shopping this year.

"Of this 61% grouping 36% will be first time budgeters this Christmas. Irish consumers are likely to be extremely prudent in their spending this year – which is not likely to be welcome news to Ireland’s retailers."

Books (52%), clothes (49%) and gift vouchers (46%) are the most favoured presents adults in Ireland would like to receive this year – and somewhat reflects the presents they prefer to buy (books 55%, gift vouchers 55%).

Some 42% of adults would like to receive cash as a present this year, but only 19% of people will actually give it.

The majority of people will buy books for the under 12s this year (42%), followed by clothes (30%).

Unusually, computer games do not feature in the top 10 gifts that are likely to be bought for the under 12s which may reflect the change in the consumer mindset towards the more expensive products.

With regards to buying gifts for teenagers, most people will give music gifts (31%) and gift vouchers (29%), followed closely by books (28%).

Some 35% of people will specifically buy gifts on the internet this year. The main reasons cited for doing so include more product choice (72%), the ease of home delivery (67%) and to avoid crowded stores (63%).

The main types of sites used are internet trading sites and supermarket websites.

With regards to internet usage in general, only 17% of Irish people will not use the internet at all.

A total of 33% of respondents who will use the internet will do so to research and compare prices, with 28% saying that they will use the web to buy everyday products and services.

The main reason identified for not shopping online is that people prefer to see or handle the product (64%).