Retail reset: Households to spend extra €900 each in Christmas and New Year sales

Households will spend on average €900 extra over the Christmas period and during the January sales this year despite the cost-of-living crisis.

etailers are expecting spending during the post-Christmas sales to be in line with the bumper €200m consumer splurge 12 months ago, and have reported strong footfall in bricks-and-mortar stores over the Christmas period.

Retailers are also expecting a spending spike among workers who received vouchers and gift cards from their employers as the tax-free limit was increased from €500 to €1,000 this year.

John Wall, managing director of Me2you Gift Cards, said gift card spending was expected to be more than 30pc higher than previous years as a consequence.

Arnold Dillon, managing director of Retail Ireland, said there have been “very significant” changes in customer behaviour this festive period as it was the first Christmas in three years not affected somewhat by Covid-19 restrictions.

“We’ve seen a reset,” he said. “We’re back to much more traditional shopping patterns and we’re back to people getting out and about for a more traditional Christmas experience.

“Retailers I’m talking to are very upbeat about the footfall they’ve seen so far. We’ve run the numbers with the economics teams and we expect households to spend an additional €890 this festive period.

“We’re expecting to see spending land right where it did last year. We saw a strong increase in retail in the first half of the year but that softened slightly due to the cost- of-living crisis. We’re going to be in a similar position to 2021, which is good.” 

Bank of Ireland (BoI) also saw a big increase in the spending by customers in the run-up to Christmas with spending up 13pc in November, indicating strong consumer sentiment.

BoI spending data also show shoppers across the country kick-started their Christmas early, with toy purchases in November doubling on previous months, while clothing (37pc) and groceries (15pc) also saw a surge.

Electronic purchases saw a big increase (+56pc) as Christmas drew near, while BoI reported an increase in spending across all 26 counties, with Longford (16pc), Galway (12pc), Donegal (10pc) and Louth (10pc) experiencing big increases.

There’s evidence that customers are preferring physical shopping this year as retailers saw online shopping fall back slightly, and this will likely lead to busy stores this week, Retail Excellence Ireland managing director Duncan Graham said.

Mr Graham said some stores were reporting up to 20pc increases in physical shopping numbers, and the absence of Covid restrictions this year meant stores were prepared for a bumper sales period.

Sales are expected to be up on last year for many retailers, which will come as a relief to traders who take in up to a quarter of their annual revenue in the few weeks around Christmas.

“I think this [post-Christmas] sales period is going to be good. It’s very hard to put a number on it, but when you see supply-chain issues resolved, retailers have prepared more and also there are more people out shopping, we’re predicting this first sales week after Christmas is going to be a strong one,” Mr Graham said.

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