Yahoo Finance Festive spending to shrink for first time in five years
Festive spending is expected to fall for the first time in five years as shoppers splurge on Black Friday bargains and rein in purchases during December.
Christmas spending is expected to be 0.1pc lower this year as the return of inflation squeezes household budgets, according to Visa. This compares to last year’s 2.8pc spending growth during November and December,
The high street is expected to be the biggest casualty of the festive spending slump, with an anticipated 2.1pc drop over November and December, the biggest contraction recorded since 2012.
In contrast, online spending is expected to surge by 3.6pc to account for a record 37.9pc of all retail purchases. Just under half, 48pc, of shoppers intend to use their mobiles to buy presents this Christmas.
“While it still looks likely that consumers will be hitting stores and websites in search of bargains this Black Friday and Cyber Monday, we expect spending for the duration of the festive season to be lower in comparison to last year”, said Mark Antipof at Visa.
Black Friday is expected to rake in £7bn this year, 20pc more than last year as the promotional frenzy now stretches for almost two weeks at some retailers. Separate figures from PwC reveal that 51pc of shoppers plan to spend over Black Friday with three quarters of those saying they will be buying online, rather than tackling the high street.
Industry experts have warned that Black Friday is threatening retailers’ profitability as they are now forced to discount at a time when shoppers would have traditionally been willing to buy at full price in the run-up to Christmas.
However, only a fifth of Black Friday spending is expected to be on Christmas presents as shoppers use discounts to treat themselves. As a result, while it might not threaten Christmas shopping yet “it does have the potential to cannibalise the January sales, a shopping period more traditionally used by consumers to buy items for themselves”, commented Lisa Hooker at PwC
