Scots set to spend more on festive celebrations

Scottish consumers are set to channel some more spending into this festive season, according to PwC’s Festive Predictions.

The increase in intended spending north of the border closely aligns with PwC’s findings across the UK, which suggests spending on gifts and celebrations will reach £22.7 billion - 5% up on last year’s £21.6 billion. Each celebrant is expected to spend an average of £433, up from £416 last year.

In Scotland, nearly a quarter (23%) of those surveyed said they plan to spend more on Christmas than they did in 2023 - compared with 15% last year - while 17% predicted they would spend less than last year. This is below the UK average of 20%.

The analysis suggests that Scots prefer a homely Christmas, with almost two thirds (62%) of consumers indicating they plan to stay at their own homes, with either immediate or extended family, while 25% said they would travel within the UK to see family. Just 11% expect to travel abroad to visit family or go on holiday.

Despite the potential uplift in festive spending, preparation remains key for buyer budgets, with the vast majority of Scots suggesting they will have completed their present shopping by early- to- mid December (49%). More than a quarter (26%) said they aimed to have their gifts in the bag ahead of Black Friday.

In terms of how this compares to previous years, 11% stated most of their gift shopping would be done earlier than in previous years, versus 12% doing the lion’s share of shopping later than they normally would.

And with more than one third (38%) of shoppers saying they will spend on Christmas gifts in-store, it seems there may be a welcome boost for Scottish retailers ahead of the big day - although 57% of shoppers said they would opt for online and home delivery.

Ross Marshall, Partner at PwC Scotland, said:

“Financial pressures continue to impact on Scots’ buying decisions, but we have seen some uplift in a willingness to spend more than last year on festivities. Those who planned to finish their Christmas shopping earlier than usual, or to have their festive hauls completed by Black Friday, are perhaps planning budgets more carefully in the run-up to the festive period to ensure they can still indulge in treats to make the season special. Given that so many Scots plan to stay at home to celebrate, it could be the case that any potential travel funds are being channeled into gifts and festive feasts.

“Our findings also suggest that consumers are seeking out the full festive experience, with almost 40 per cent saying they’ll shop in-store - perhaps combining some early Christmas celebrations with their shopping. Hopefully this will give stores across Scotland’s high streets and shopping centres - as well as restaurants and hospitality businesses - a festive boost.”

Will UK retailers enjoy a successful end of year?

Despite only a modest increase in planned outlay over the festive period, consumers’ net spending intentions are more positive than in 2022 and 2023 across all major spending categories, reflecting shoppers’ higher disposable incomes following the cost-of-living crisis. The biggest festive winners are expected to include:

• Supermarkets - food and drink is a top spending priority for most and particularly for those over 45. With food inflation falling below 2%, this suggests that consumers will be both buying more and trading up to premium and extra special products to treat themselves over the festive period.

• Fashion - adult clothing is the third biggest spending priority for consumers, and the number one for under 25s. Following a challenging year, compounded by unseasonal weather suppressing sales, PwC’s latest research points to more consumers treating themselves to new wardrobes which may not have been refreshed for several seasons.

• Electricals and technology - this category has jumped from ninth to fifth most important for consumers in 2024 (after food, Christmas dinner, fashion and stocking fillers), and is the top spending category for 35-44 year olds. This reflects a more exciting new product release pipeline in gaming and wearable technology, and follows a stronger performance over the Black Friday period.

There is also a growing trend of UK consumers starting their Christmas shopping earlier, with 48% saying they have already bought most of their presents before the beginning of December, compared to 43% last year. This shift is driven by a desire to stay organised (38%) and spread the cost of gifts (34%), both of which saw increases from 2023. Younger shoppers are leading this trend, with 29% of 18-24-year-olds and 24% of 25-34-year-olds shopping earlier than usual.

However, the majority of consumers still do most of their festive spending in December, with as many as 8% leaving it until the week before Christmas. Women and under 25s are the most organised, with 55% of women and 63% of under 25s claiming to have bought most of their presents by the start of December.

Spending will be evenly balanced between the physical shops and online. Shoppers say that 55% of Christmas present spending will be online for home delivery, with 10% click and collect and the rest bought in physical stores (36%). Click and collect is most popular amongst younger people (15% for 25-34 year olds) and in London (16% of spending). While older shoppers still favour in-store purchases, even those aged 65+ are buying almost half of their gifts online.