UK: Inflation to hit Christmas shopping

August saw consumer confidence among UK consumers become negative for the first time since the early days of the COVID-19 pandemic, according to the latest YouGov/Centre for Economics and Business Research poll.

The slump comes ahead of the Christmas shopping season, with many consumers feeling the pinch from rising energy prices and a cost-of-living crisis, making it a tricky time for shoppers and retailers alike.

A new survey from YouGov reveals that four in five (79%) Brits intend to do holiday shopping this year, with two-thirds (66%) of holiday shoppers saying inflation will have a major (34%) or moderate (32%) impact on their shopping. Another fifth (18%) say inflation will have at least a minor impact on their shopping and only one in 10 say it will not affect them at all (10%).

The poll shows most holiday shoppers are also feeling stressed in the lead up to the holiday season. More than two-thirds (65%) say they are very (26%) or fairly (39%) worried about the impact of inflation on their holiday shopping.

Parents of children under the age of 18 are especially sensitive to concerns over inflation’s impact on their holiday shopping (78% vs. 65% of non-parents).

What are consumers looking ahead of peak holiday shopping season?

To better understand what holiday shoppers are expecting from brands this year and gauge how their concerns over inflation will change their shopping behaviours, YouGov asked them about the shopping experiences that matter to them. Below are few key insights from the study:

• A reduction in the number of gifts: More than four in five holiday shoppers who are worried about inflation’s impact on their shopping say they will likely be buying fewer items this year.
• On the hunt for sales and alternative products: Unsurprisingly, 80% of concerned holiday shoppers will be buying things that are on sale or discounted. What’s more, over a third say they will shop with brands or stores they don’t typically buy from.
• Boost the holiday spirit with free shipping and returns: A majority of concerned holiday shoppers say that free returns (63%) and free delivery (55%) are essential shopping experiences for them this Christmas season.
• Bring your brand experience to in-store and online shoppers: Nine in 10 (89%) concerned holiday shoppers say they will shop online and in-stores this holiday shopping season. This makes omni-channel experiences critical to the various ways consumers will interact with brands throughout the holiday shopping season.
• Speaking of omni-channel, here's where to connect with them on social: We looked into how consumers spend their time on social media and among holiday shoppers who are worried about inflation’s impact on their shopping, more than half used social media such as WhatsApp, (83%), Facebook (73%), Facebook Messenger (64%) within the last month. Many also spent time on Instagram (48%), Twitter (39%), TikTok (30%), Snapchat (16%) and Pinterest (15%) recently.
• A season of conscious gifting: Amid supply shortages and shipping delays last year, some shoppers turned to second-hand goods to meet their gifting needs. The trend may well carry into this year’s holiday shopping season, with 34% of concerned holiday shoppers saying they will buy second-hand.