Santa clause: Recession to hit Christmas splurge

COVER your children’s ears and tell them to leave the room: the worst recession news yet is about to arrive.

Santa Claus could become the latest victim of the economic downturn, after research claimed the average Irish shopper is preparing to slash their spending on gifts for family and friends during the Christmas period.

Financial firm Deloitte has reported that despite the season of goodwill being just around the corner, Irish spending over the course of December will plummet by more than 10% as the reality of the recession hits home.

According to the survey, almost two out of every three (60%) of the 672 consumers will mirror the Government line by imposing scrooge-like personal budgets this Christmas.

And while the average Irish household will still spend €1,354 this December, this figure means Irish shoppers will each spend 5.3% less over Christmas compared to 2007 — a figure which rises to more than 10% when inflation is taken into account.

According to the survey, the most popular adult requests for gifts this year are likely to be books (57% of respondents), with music and clothes following close behind.

The Nintendo Wii topped the under-12s wish lists and — perhaps unsurprisingly — cold, hard cash was teenagers’ gift of choice.

However, in a symbol of the recession times, the Deloitte survey has suggested people will be left disappointed when they open their presents with the proverbial lump of coal — normally a pair of socks — replacing sought-after gifts.

The survey, carried out between September and October, reported this winter the average spend per household in Ireland will be €1,354, with almost half of this figure (€668) splurged on gifts.

Last year, the average household spending figure over Christmas stood at €1,431, a 6.9% increase on 2006. But with the economic downturn continuing to affect the country, the spending is due to drop by more than €100 — with a 7.2% fall in spending on gifts alone.

As a result, shoppers are increasingly looking for bargains, with 35% of respondents saying they have already taken advantage of pre-Christmas sales, 17% waiting for post-Christmas sales, 61% planning to buy gifts on promotion, and 53% purchasing less luxury gifts.

Among the key issues contributing to this financial slump, the survey has noted, include the international recession (93% of respondents, 33% last year), a further downturn in 2009 (71%), job insecurity (55%), political instability (55%), and a loss of spending power (60%).

Despite the Christmas cutbacks warning, however, the survey noted Ireland will remain the biggest spender in Europe this yuletide, ahead of Britain in second place and Spain in third.

“Last year, the survey found consumers were still willing to spend despite a gloomier outlook on the economy. But this year, the purse strings are finally being pulled tight,” said Deloitte consumer business partner Susan Birrell.

Watching your figures

How they calculated the figures:

The figures from the annual Deloitte spending power at Christmas survey are calculated by a national survey over the last week of September and the first week of October.

A total of 672 people over the age of 18 were asked through an in-depth online questionnaire about their Christmas spending plans. The information was examined under criteria including socio-demographic trends, personal interests and consumer behaviour.

The information was compared with findings from the survey over the last seven years to see what impact the economic downturn has had on Ireland’s Christmas spending power.