Post-recession shoppers splurge on ‘big ticket’ items for Christmas

After eight years of penny-pinching, consumers have finally found the confidence this Christmas to splash out on ‘big ticket’ items, Retail Ireland has confirmed.

Retail bodies are predicting that by Christmas Day, shops will have seen an average increase in trade of anywhere between 3% and 5%, and it is the high-priced items that are seeing the greatest resurgence.

“The suggestion from our members is that things have picked up, that trade has been relatively brisk,” said Retail Ireland director Thomas Burke.

“There are pockets of the country that have been affected by flooding so it is not universal by any means, but certainly the main urban areas seem to be performing relatively strongly.”

He said his organisation had predicted ahead of the festive period that sales would increase by about 3.5% this Christmas, compared to last year.

“At this stage we would be hopeful that target could be met. Nonetheless, there are still a few days to go yet and still plenty of time for it to go either way,” he said.

Mr Burke pinpointed the areas where sales had particularly increased.

“The electrical category is performing strongly, as is furniture and homewares,” he said. “It does tend to be the big ticket items that seem to perform strongly. That has been a consistent theme throughout the year.

“To put a caveat on that, they are the categories that were worst affected during the downturn and experienced extreme declines. They were always going to be the areas where, when the pick-up happened, they would recover the quickest because they were coming off the lowest base.”

Mr Burke said there was an element of “pent-up demand” as well.

“People have put off those big purchases for quite a number of years,” he said. “Now that things are starting to free up a little bit and there is a little bit more disposable income, they are going to go and buy those things first.

“The other category of note that is performing quite strongly is menswear. Men seem to be actually spending money on themselves once again.”

Mr Burke pointed to the excellent value consumers are getting at present, considering the “value- volume split”.

“Volume is increasing at nearly three times the rate of value,” he said. “So that suggests there is real value to be had for consumers this Christmas. Goods are being discounted heavily across the retail network. Goods prices are running at about -4%, about the equivalent levels of 2001.”

Retail Excellence Ireland also said that, with many workers having been paid yesterday, peak demand will kick in and the mindset of most being that there is lots of shopping time before Christmas, this weekend and next week and “next week will make or break 2015 for many retailers”.