Covid pinches this Christmas, as UK households rein in festive spending, Accenture survey finds

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Over a third of UK consumers plan to spend less this Christmas than they did in 2019, according to new research from Accenture.

Accenture’s 2020 UK Festive Shopping Survey shows a dramatic uplift in consumers planning to spend less on festive purchases this year (36%), more than doubling from 13% who planned to spend less in 2019. Only one in ten people plan to spend more (13%), down from three in ten last year (31%) – a clear sign consumers are feeling the Covid pinch.

Many plan to shop more responsibly – almost two-thirds (63%) said they would shop more consciously to limit food waste this festive season, while a similar proportion (64%) said they would be open to receiving homemade gifts this year, with 51% open to giving them.

This mood of heightened social consciousness during the pandemic has also impacted where people are likely to shop. Almost half (48%) say they would be inspired to shop with a retailer who has supported their staff and customers through the Covid-19 crisis. Over half (51%) said they would buy more locally sourced products.

Even before the second lockdown came in, the vast majority of people have voted to do their shopping online this year, with eight in ten planning to do so. Almost 80% of these shoppers are expecting to have the item delivered to their home and are perhaps setting themselves up for disappointment, as nearly 40% are expecting both fast and free parcels this Christmas. This is despite warnings of delivery infrastructures being unable to cope with radically increased demand and mounting pressures on retailers to fulfil, further compounded by the second lockdown across England.

Consumers are clear that failures to get pandemic processes and procedures right will deter them from shopping with retailers, with 58% saying they would avoid stores where employees are not wearing appropriate PPE. However, 50% said they would be deterred if they had to queue outside in order to limit numbers in store for social distancing purposes. This marks a clear challenge for retailers remaining open during current Covid restrictions, as well as those who will want to capitalise once non-essential stores can re-open.

Meanwhile, almost half (49%) have said they will be using contactless payments to a greater extent, while 45% will be using cashless ways to pay due to hygiene and payment security factors.

Andrew Carlisle, Accenture retail consulting lead for UK and Ireland, said: “This is a make or break Christmas for retailers – getting it right has become all the more crucial as the second lockdown starts to bite and modes of shopping become more constrained. While shoppers are clearly feeling the Covid pinch and are scaling back festive buying, the desire to spend and celebrate has not gone away as they become more discerning on where to spend their hard-earned cash.

“Despite the challenges of the pandemic, consumers are giving retailers little room for error when it comes to fulfilment delays or long queues to maintain in-store safety.

“There are, however, glimmers of hope for those retailers who are experimenting with new ways to overcome the pandemic once the immediate lockdown passes, through appointment-based shopping or harnessing technology for seamless in-store experiences.”

Shoppers look set to favour physical gifts over experiences this year, with almost two-thirds (64%) opting for the former. In a sign that shoppers want to treat themselves and their loved ones, while spending more time at home or in smaller groups:

  • Food and drink is set to be the most popular gift option – 65% said they would be buying the same or more than last year
  • Health and beauty will also be popular – 63% said they would be buying the same or more than last year
  • Almost a quarter (23%) said they would buy less clothing and footwear gifts.