Increased spend was a gift

Retailers feared that consumer spending would fall in Christmas 2001, but consumers defied predictions and spent more on gifts than ever before

The UK’s retailers voiced concerns that consumers would stay away from the high street in the last quarter of 2001. Their fears were unfounded and the number of Christmas presents bought increased by more than five per cent during November and December compared with the same period the previous year.

Taylor Nelson Sofres’ (TNS) Gift Trak Monitor’s study on gift spending in the UK says that more than 1.5 billion gifts – worth an estimated &£35bn – were bought in the UK during the 12 months to December 2001. In fact, consumers bought more than 4 million gifts every day last year – an average of 4,156,611.

Not surprisingly, Christmas presents constitute a significant element of the gift market, with over a third of all gifts being bought specifically for Christmas. In addition, the average amount spent on Christmas gifts has increased by 11 per cent – &£24.78 in 2000 to &£27.27 in 2001 – in spite of low inflation. The findings suggest that spending at Christmas remained buoyant and the events of September 11 and the consequent global economic slowdown did not deter consumers.

Toys and games remain the most popular Christmas presents (16 per cent), followed by toiletries and cosmetics (eight per cent).

While these figures demonstrate a thriving Christmas gift market, over 54 per cent of people in November, and almost 38 per cent of people in December last year, did not buy a Christmas present. This suggests that significant proportions of individuals either do not give gifts during the festive season, or maybe decide to do their Christmas shopping earlier in the year.

In fact, more than 66 million gifts, representing 11 per cent of the total Christmas gift market, were bought for Christmas during the first ten months of 2001. Almost 5 million of these were bought in January.

Christmas is clearly the most popular occasion for giving presents, but “impulse buying” constitutes more than ten per cent of the total gift market. More than one in six purchases of women’s clothes (16 per cent) and more than one in five food gifts (21 per cent) were bought on impulse in 2001. Interestingly, the total number of impulse buys made last year were about four times higher than the number of gifts given by people at Easter, and 16 times higher than the total number of gifts bought for St Valentine’s Day.

With the total value of the St Valentine’s Day gift market estimated to be worth almost &£220m during 2001, men view this as one of the most important gift-giving occasions of the year, buying more than two-thirds (67 per cent) of all Valentine’s gifts. In addition, 74 per cent of all “I’m sorry” presents are bought by men by comparison to just one third of all Christmas gifts (34 per cent).

Men also buy only 32 per cent of all birthday gifts. This suggests that men are more likely to buy gifts on the spur of the moment, often to apologise or express their affections, while women are more likely to plan purchases in advance and therefore buy more gifts for key calendar events such as Christmas and birthdays.

While the Internet has not yet taken off as a significant medium for gift-buying, online Christmas spending doubled last year, with almost 9 million Christmas gifts being bought over the Net during December 2001, compared with just 4.5 million in December 2000.

The majority of consumers (54 per cent) who bought presents online last year live in the South. Fewer than three out of ten (26 per cent) live in the North and just one-fifth live in the Midlands. In comparison, figures for the total gift market show that of all presents bought by adults, 38 per cent live in the South, 27 per cent in the Midlands and 35 per cent in the North. These findings indicate that people in the South are more likely to buy gifts online.

The TNS Gift Trak Monitor’s study concludes that despite concerns about recession in other countries having a knock-on effect in the UK, the purchase of gifts for Christmas showed a small increase last year. This suggests that the retail market has not been as sensitive to the global economic slowdown as was initially predicted.

During 2002, TNS anticipates that online gift-buying – particularly of books and CDs – will continue to increase as more people gain access to Internet facilities and concerns about online security are addressed. In addition, impulse buying, while a difficult sector to plan for, is likely to pick up again to its fairly consistent 20 per cent share of all gift-buying throughout the year. This is an important part of the gift sector and one that presents quite a challenge to retailers and manufacturers in so far as it is predictable for its unpredictability.

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