as shoppers spend more but buy less

Shoppers will spend more this Christmas, but will do so as a result of rising food costs rather than purchasing more products, according to Verdict Research. It has forecasted that consumers will spend £82.3bn in the final quarter of the year, an increase of 2% from 2007.

The report complied in partnership with property consultancy EC Harris also found that shoppers would be more selective when buying food and presents for Christmas – purchasing less of both as inflation increases spending levels.

It has also found that non-food retailers are likely to face a worrying Christmas period, despite inflation affecting their prices, thanks to more selective consumer habits.

The forecast is especially bleak for home-related and DIY retailers, which will suffer from the double blow of not being the type of businesses that experience seasonal sales peaks during Christmas, as well as the collapse of the housing market.

In the first quarter of 2009, Verdict predicts the situation to get worse as consumers rein in any unnecessary spending due to the arrival of credit card bills before Christmas.

Maureen Hinton, lead analyst at Verdict says: “Not surprisingly food and grocery accounts for the largest share of shoppers‚ spending over the Christmas period (38%), and with food inflation running at 6.3% this quarter, consumers are facing a more expensive Christmas feast.

“But unavoidable though this extra expense will be, shoppers will be more careful in what they buy, balancing spending on treats with cutbacks on everyday foods.”

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