Retail reset: Households have to spend €900 more each on Christmas and New Year sales

Despite the inflation crisis, households are spending an average of 900 euros more this year over the Christmas period and during the January sales.

Retailers expect spending during the post-Christmas sale to match the €200m sales volume seen 12 months ago and have reported strong footfall in brick-and-mortar stores over the holiday season.

Retailers are also expecting a boost in spending from workers who have received vouchers and gift cards from their employers as the tax-free limit has been raised from €500 to €1,000 this year.

John Wall, managing director of Me2you Gift Cards, said gift card spending is expected to be more than 30 percent higher than in previous years as a result.

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

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

“Retailers I speak to are very optimistic about the frequency they’ve seen so far. We’ve compared the numbers with the economic teams and expect households to spend an extra €890 this holiday season.

“We assume that the same amount of land will be spent as last year. We saw a strong increase in retail in the first half of the year, but this has moderated slightly due to the cost of living crisis. We’ll be in a similar position to 2021, which is good.”

The Bank of Ireland (BoI) also saw a sharp increase in customer spending in the run up to the holiday season, with spending up 13 per cent in November, indicating strong consumer sentiment.

BoI spending data also shows that shoppers across the country got their holiday season off to an early start, with toy purchases doubling in November from previous months, while clothing (37 items) and groceries (15 items) also saw increases.

Electronic purchases saw a big increase (+56 per cent) as Christmas approached, while BoI reported increases in spending across all 26 boroughs, with Longford (16 per cent), Galway (12 per cent), Donegal (10 per cent) and Louth ( 10 percent) recorded large increases.

There is evidence that shoppers are preferring to shop physically this year as retailers have seen a slight drop in online shopping and this is likely to result in busy stores this week, said Duncan Graham, chief executive of Retail Excellence Ireland.

Mr Graham said some stores were reporting increases in physical shopping figures of up to 20 per cent and the lack of Covid restrictions this year meant stores were braced for a record sales spree.

Year-on-year sales are expected for many retailers, which will take some of the pressure off retailers, who generate up to a quarter of their annual sales in the few weeks leading up to Christmas.

“I think that [post-Christmas] Selling period will be good. It’s very hard to give a number, but when you see supply chain issues resolved, retailers better prepared and also more people going shopping, we predict this first week of sales after Christmas will be a strong one.” said Mr Graham. Retail reset: Households have to spend €900 more each on Christmas and New Year sales

Fry Electronics Team

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