Sunday 22 September 2019

Paul Moran: 'We are shocked at the selling out of Christmas but still splash the cash'

Most people think that Christmas is too commercial, yet carry on their festive spending, writes Paul Moran

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Paul Moran

With just one full shopping day left before the madness of our consumer splurge subsides for another year (or alternatively, until the post-Christmas sales), it is timely to understand how we feel about Christmas, and how we embrace it.

This Sunday Independent/Kantar Millward Brown Poll, conducted up until last weekend, sought to quantify this.

As a nation, we firmly believe that Christmas has become too commercial - 86pc of us agree with this sentiment. What is even more instructive is that we are not holding back in our views either. Three in five (60pc) strongly agree that Christmas has got out of hand, versus 26pc somewhat agreeing. Just four per cent refute such a notion.

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Seemingly, we are aghast at such wanton commercialism. Retailers have shoehorned us into believing that the festive season begins the day after Halloween. Black Friday has become de rigueur and signals the firing gun of our festive frenzy.

There are few demographic differences - most of us feel the same. The youngest age cohort, of 18-24-year-olds are slightly less cynical, as are Dubliners (8pc of both disagree with the sentiment). But generally, the view is pretty unanimous that Christmas is not what it used to be.

We are either missing the true meaning of Christmas, or that the season has been hijacked in a way that is beginning to make us feel queasy. Of course, it is not a crude binary choice - the true answer more than likely lies somewhere in between.

And yet, we are spending like there is no tomorrow (or more appropriately, the day after tomorrow).

We are on course this year for our first billion-euro December in terms of grocery spend. Our sister company, Kantar World Panel, tracks grocery spend on a continuous basis, and has recently released a fascinating piece of analysis. In the four weeks on the run-up to Christmas in 2017, we, as a nation, spent €970m on groceries.

We know that spend is currently up year-on-year, and notwithstanding food inflation, we should comfortably reach the billion-euro watershed moment this Christmas.

Given that Christmas falls on a Tuesday will also bolster spend, as consumers will have both the weekend and one "extra" day to continue shopping.

It seems to be a case of "do as I say, but not as I do". For some, the festive period compels us to spend money like a sailor in port; particularly apt seeing as we don't know what choppy waters lie ahead.

So what are we spending our money on? This year, the average household will fork out €525 on presents, €292 on food for the household and €147 on drink for the household. In addition, on average, we will spend €139 eating out and €131 in pubs.

Of course, averages can be sometimes misleading, and mask the variances across the spectrum. For example, approximately one in four of the Irish adult population is teetotal, so this will down-weigh our spend on alcohol.

In terms of demographics, those aged 45-54 tend to be higher spenders in general, arguably due to a mix of factors such as life stage, career development and higher spending power based on having pre-boom mortgages.

But the real story is regional differences, and unsurprisingly, socio-economic classifications. Dubliners are consistently the highest spenders across all categories. This is reflective of other findings in today's poll, whereby the capital is perceived to have overwhelmingly and disproportionately benefited from our second boom.

Metropolitans will spend more than twice as much as any other region in terms of buying drink for the household (€267), going out to restaurants (€228) and going to the pub (€210). Disposable income for many in the capital is apparently not as much an issue.

As expected, festive spend correlates strongly with social class. ABs (professionals, who tend to have higher incomes) lead the way, and spend then tapers off as you work through the different social classifications.

So with all this money apparently available this Christmas, where are we spending our money? Traditional "bricks and mortar" retailers in Ireland have consistently voiced concerns about the effect of online shopping. Looking to the UK as a portent to the future, where many of their traditional high street names have suffered an annus horribilis, there is a fear that the same fate is inevitable here.

There is no doubt that consumer shopping behaviour is changing.

The proportion of gifts bought this Christmas online is 25pc. In essence, for every three euro spent in shops, one euro is going elsewhere, and the flow is often abroad.

This shift is sure to continue in one direction only, and our main street retailers will have to be both nimble and quick to counteract this threat.

The generational divide in shopping behaviour is stark; the charge towards online shopping is led by the young, and the older you get, the more comfortable you are with the status quo.

Either way, Christmas this year feels quite contradictory; we hanker for the traditions of the past, but are looking towards the future.

  • Paul Moran in an Associate Director with Kantar Millward Brown.

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