Over half of Midlands shoppers have already started Christmas shopping

PwC released its seasonal sentiment survey, with the results holding firm from the previous edition in the summer.

The report found that 64% of East Midlands consumers and 57% of West Midlands consumers have already started shopping for Christmas this year, with more consumers looking to spread the cost in the lead up to the festive period. 

This has led to 16% of East Midlands shoppers and 18% of West Midlands shoppers increasing their Christmas budgets this year to treat family and friends, while over a quarter in the Midlands said they plan to spend less than previous years. 

Sarah Phillips, PwC Partner and Consumer Markets Leader for the Midlands, said: 

“Every year it seems that Christmas starts earlier and Midlands shoppers are taking advantage by getting ahead in order to spread the cost over the second half of the year. 

This provides a steady stream of sales for the high street and has led to some shoppers feeling they are able to spend more this Christmas. That said, we can see the cost-of-living has led to some consumers tightening their festive budgets as inflation impacts household spending. 

“Elsewhere, the report found that 32% of UK adults felt it was important to keep Christmas special, which will be encouraging for hospitality as well as the high street, as consumers will be more inclined to spend on Christmas celebrations with family and friends. With the Midlands being home to various shopping and dining destinations, we should hopefully see a boost to the high street this festive season.”

UK Outlook

Across the UK, the results are holding firm from the previous edition in the summer. Overall the -13 sentiment reading remains the highest point for 18 months and an improvement of over 30 points since the low of -44 in Autumn 2022, which was the worst score recorded since the Global Financial Crisis in 2008. 

Despite sentiment holding firm, the widest gap on record (52 ppts) now exists between the most and least affluent socioeconomic groups since the survey began. Sentiment is still improving amongst over 55s and the most affluent, but it is falling in every other demographic group, particularly sharply among under 25s and the least affluent. 

Now 45-54 year olds expect to be the worst off across all age groups, with under 25s also dropping below 25-34 year olds. The trend for under 25s is unusually low for this time of year - autumn has historically seen a more positive trend as young people head into the world of work or education. However, those under 35 do remain in net positive territory - as they have done historically - driven by more younger people living at home, being more likely to have benefitted from wage rises, less likely to have been affected by mortgage rate rises, and having more disposable income as a result. 

Almost identical to the last consumer sentiment survey, the less affluent and 35-54 year olds remain under the greatest financial pressure, while retirees are the group reporting the most resilient household finances. For example, 44% of over 65s say they have money left at the end of the month for luxuries or to save, compared with 23% of 35-44 year olds.

Overall, just under a third of adults report that their household finances are ‘healthy’, a slight improvement on this time last year. At the other end of the scale, fewer than one in ten say they are either struggling to make ends meet or have missed bills or loan repayments. This number rises to 15% of 45-54 year olds, and to just under a quarter of the least affluent socioeconomic group.

With financial considerations in mind, consumers are shopping earlier than in previous years, and many are expecting to spend less on Christmas. Already 1 in 5 had started their Christmas shopping by mid-September, with more than 1 in 3 saying that they either have started their shopping or are planning to shop earlier this year.

However, only 18% of adults say they expect to spend more on shopping and celebrations this Christmas, with just over half saying they will spend the same as last year. That means that almost one in three adults say they expect to spend less this year, with the overwhelming reason being due to the rising cost of living: just under 80% of those who plan to spend less say it’s because of rising food and energy costs, compared with only 23% citing mortgage or rent payments. 

Lisa Hooker, Leader of Industry for Consumer Markets at PwC comments:

“Consumer Sentiment has been on a rollercoaster over the last few years, but it is encouraging to see that the -13 score has held from summer and is in line with the long term average. We are seeing increasing divergence between age and income groupings, with a surprise drop in sentiment for the under 25 year olds perhaps reflecting a more challenging job market, the growing cost of further education, as well as increasing rents for those who have left home. 

“Looking forward to the key Christmas trading period and with shoppers wanting to protect spending on family and special occasions, they are starting preparations early and being cautious, with over a third of consumers planning to shop before the peak festive trading times, and many also saying that they will spend less. However, last year shoppers did spend more than expected, so with falling headline inflation, there may yet be a last minute spending uptick.  Retailers will certainly be on tenterhooks.”