We’ve recently reported on the sacrifices medium to high income households are making in order to cope in these increasingly tough financial times (see ‘The Cost-of-Living Crisis: Bigger Sacrifices’) and we were curious to understand how this is likely to impact on Christmas spend. Christmas is traditionally a time to splash out regardless, but will that hold in 2022?
So, what impact is the cost-of-living crisis really having on festive plans? Will there be radical festive cut-backs, or will it be Christmas as usual?
Christmas 2022 is shaping up to be a year of major cut-backs, the likes of which nobody would have predicted this time last year. Plans are afoot to spend prudently and to conjure up festive magic without getting carried away.
But there’s nothing bah humbug about it and Christmas is far from cancelled. It’s just that, for many, the cost-of-living crisis has forced something front of mind which was already known deep down. As the Grinch put it, “What if Christmas doesn’t come from a shop?” What if festive joy is all about time spent with those you care about, and is possible without new year debt? For many brands and retailers that’s a deeply troubling conclusion for their shoppers to have come to.
Plans are in place for a radical reduction in Christmas spend achieved by…
BUYING PRESENTS SENSIBLY
RESTRICTING FOOD & DRINK TO WHAT WILL BE TRULY APPRECIATED
CREATING FESTIVE EXPERIENCES & EVENTS ON A BUDGET
We asked 20 of our FastQual ready respondents (broad mix from above to below average affluence) to talk to us about their festive intentions: how they’re planning, budgeting, shopping and celebrating in 2022, and whether it differs to previous years.
With widespread festive cut-backs planned across numerous categories, brands and retailers will need to battle for their share of a reduced Christmas spend pot. Ploughing ahead regardless of changing festive needs risks alienating customers and missing out on new festive opportunities.
Where changes are still possible, Christmas 2022 plans should be reviewed and, given the longer-term economic outlook, a thrifty customer mindset should also be planned on for Christmas 2023.
Last year a lot of people were having a mindful but expensive Christmas. We didn’t want to consume (too) wastefully, but the association between Christmas and over-indulgence held strong. The cost-of-living crisis has accelerated reappraisal of festive priorities and in 2022 we’re sure that joyous time spent together is the only thing that truly matters.
Once ‘enjoyable time together’ is established as the one truly important element of Christmas, a number of products and services are very vulnerable to being sidelined. It is easy for people to decide which spend is crucial and what can be cut without too much impact on festive magic.
People are absolutely clear that this isn’t a year for needless extravagance and are determined to shop for presents with their sensible heads on. The plan is to buy less, buy useful, and find cheaper ways. Splashing out is more acceptable for children but wasteful purchasing is still frowned upon.
A Christmas in lockdown had us all desperate for Christmas experiences outside of the home: the theatre, Christmas light walks, grottos and more. This year there is a desire for festive ‘build up’ experiences, and we will still want to celebrate with those we don’t see on the key Christmas days, but many will be looking for free, cheaper or DIY alternatives… and this creates opportunities.
For the grown-ups, food & drink is at the centre of festivities, but that doesn’t mean they can’t easily think up products they could trade down on, or skip altogether, without anyone really noticing. This year spend is reserved for food and drink which will be fully appreciated, so extras or upgrades need strong justification.
This Christmas we’re seeing an unprecedented determination to avoid excessive spend and reduce waste. Brands and retailers should assess Christmas plans through this lens and ask themselves three questions: