Brits rein in festive spending as coronavirus pandemic bites

47% of UK consumers intend to spend less during this December festive season compared to last year, according to research by EY.

1,002 Brits were surveyed. Only 38% are planning to participate in the next big shopping or sales event, and 27% of those that intend to do so will splash out less than on previous occasions..

29% of UK consumers reported that their income has decreased because of the impact of Covid-19. 53% across all income levels, including 53% of high-income earners and 54% of middle-income earners, are thinking more carefully about their spending as a result of the pandemic.

49% across all income levels say they are now trying to save more money than in the past, rising to 55% for high-income earners and 51% for middle-income earners.

Among those who were still planning to participate in big shopping or sales events, 76% expect to shop mostly online or online only. Just 3% plan to shop mostly or only in-store. 

The online trend is also extending to groceries, with 28% of UK consumers saying they will primarily buy fresh food from online retailers or direct suppliers, rising to 31% for packaged food.

This is similar to the proportion of UK consumers who primarily buy their food from high street retail locations (28% for fresh food and 30% for packaged food).

Mona Bitar, EY UK & Ireland Consumer Leader, comments: “While UK consumer spending may be reduced, remaining demand will be directed online. Retailers could be facing a dramatic increase in online purchasing over the coming weeks and this will pose challenges for capacity and fulfilment for many.”

“They will need to reinforce the technological and fulfilment infrastructure necessary to meet demand. What would have been a 10-year transition has happened in less than a year, and retailers need to act now with agility and focus.”

“Doing so now will not only maximise their chances of thriving during Black Friday and Christmas, but position them for future growth in the long-term,” she concludes.

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