23/11/2005

Christmas spending predicted to drop

The High Street could be heading for a gloomy festive season, as a new report suggests that Britons will be reducing their spend on Christmas gifts.

A survey by accountancy firm Deloitte predicted that consumer spending on Christmas gifts would drop by 2.8% this year – the first time in a decade that a drop in festive spending has been predicted.

The firm estimated that the UK’s total spend on Christmas gifts this year would fall to £14.7 billion, a drop of £400 million on last year’s total of £15.1 billion.

Deloitte also found that many consumers were planning to avoid using their credit cards over the festive period, with 80% of respondents saying that they planned to use cash or debit cards to pay for purchases.

However, the firm predicted that Internet sales would increase by 50%. Supermarket spending was also predicted to rise slightly, from 6% to 8%, and spending on food and drink was also expected to rise by 1.3% to £7.6 billion.

Britons were also expected to spend more on socialising this year, with a predicted increase of 5.9% to £6.8 billion.

Deloitte’s survey involved 1,000 UK consumers.

(KMcA/SP)

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