Business Irish

Monday 25 September 2017

Austerity or not, we'll still splash out this festive season

John Mulligan

John Mulligan

Despite the austerity measures that Irish consumers have been hit with since 2008, we still remain Europe's biggest spenders at Christmas.

Irish families are expected to fork out a total of €1.5bn in the run-up to the festive season as they splash out on gifts, food and drink. That's an average of about €900 per family, according to a recent Deloitte survey. Still, we do have big families.

It's lower than the figure would have been a few years ago, but still higher than what families in Luxembourg or Finland – the next highest spenders – will dish out as they stock cupboards and buy gifts.

There's a sense among many retailers that this Christmas season might be their best such trading period since 2007.

"There's certainly a sense that, if nothing derails it, it could be quite a good Christmas," Blaine Callard, the boss of Harvey Norman Ireland, told the Irish Independent.

But he says the feel-good factor among consumers remains on a knife-edge. He added that people are back at stores, "kicking the tyres" and considering purchases they might not have in the last few years. The Deloitte survey indicated that spending by Irish families this Christmas will decline 1.7pc.

But a report this week from Barclays Bank Ireland says that the spending figure will rise.

SALES

The Barclays survey says that 80pc of retailers think this year's Christmas sales will exceed or match last year's, while 40pc of them believe that consumers will spend, on average, more this year than in 2012.

Just fewer than 20pc of the retailers surveyed by Barclays fear consumer spending will decline this Christmas and only 16pc of the respondents were completely downbeat, saying they felt less confident about trading this season.

"It is encouraging to see that, after some time, the confidence of retailers is improving, which is in direct correlation with the gradual improvement in consumer confidence in recent months," said Helen Kelly, head of large corporates for Barclays Bank Ireland.

"The recent decision by the ECB to cut rates by a further 25 basis points should help boost sentiment further and hopefully result in strong sales at the tills this Christmas, which would give the retail sector a much-needed boost."

In October, consumer confidence in Ireland hit its highest level since June 2007. The KBC Bank Ireland/ESRI consumer sentiment index hit 76.2, up from 73.1 in September. That survey took place before last month's Budget, however.

Some retailers think that sales generated from people using mobile devices could rise as much as 50pc this Christmas.

Just over one-third of retailers – 36pc – think internet sales will experience growth this year. Almost half – 48pc – think online shopping traffic will rise by at least 11pc in Christmas Day compared to December 25 last year.

Bad weather and a possible fall in consumer confidence continue to rank among the key concerns for 28pc of retailers this Christmas. But 40pc cite delivery problems as the main concern, with 32pc saying website failures are their biggest fear.

Irish Independent

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