Monday, June 5, 2023

Inflation slows Christmas spending: Only 15% of consumers will increase their shopping budget

In the last three years, the word “Christmas” has been followed by the adjective “atypical”. In 2020 and 2021, the reason for this was the coronavirus and its variants. inflation this year. For this reason, according to the Funcas analysis center, despite the end of sanitary restrictions, most Spaniards will spend this Christmas in the same way as last year. In a survey conducted between December 2 and 12 on a sample of 1,032 Spaniards aged 25 to 65, think tank Reveals the effect of rising prices—and the subsequent loss of purchasing power—on household spending intentions on Christmas Eve and Christmas. According to the report, an average of 72% people will keep their Christmas disbursements compared to last year. Only 15% will increase it.

At the end of the year, the focus of inflation is on food. While the CPI for November was 6.8%, food rose 15.3%, just one-tenth from its all-time high (set just a month earlier). Added to this short-term inflation are seasonal increases in the prices of specific items on these dates, such as fish or shellfish. This implies that the expenditure will be more difficult to fill the table. According to the majority of people surveyed, the amount they are going to spend on Christmas Eve dinner and Christmas lunch will be roughly the same as what they spent last year: Christmas Eve About 69% and 75% say the same about Christmas.

The survey, published this Tuesday, breaks down the expenditure of households on the basis of their income and the object of their disbursement. The income gap is clear: in households with greater purchasing power, with an income above 2,000 euros, the percentage that will spend more is greater (20%), and the percentage that will reduce their consumption is residual. As purchasing power falls, the balance turns the other way: almost one in five households with an income of €1,000 or less will spend less money on these holidays, and 67% will spend the same.

The forecast of spending no more than last year in purchasing gifts is also prominent. The average estimated spending on gifts is close to 195 Euros, with a difference in favor of women (205 Euros compared to 183 Euros for men). The average amount of money offered for gifts also varies depending on age: it exceeds 200 euros among those surveyed between the ages of 45 and 65, while among those aged 25 to 34 It’s less than 150 Euros. Among those surveyed living in households with a monthly income of more than 3,000 euros, the expected outlay on gifts increases as household income levels exceed 280 euros.

The results of this survey broadly match those of other recent market studies. According to a Christmas consumption study by consultancy Deloitte, the average spending per household this year will be around 634 euros. In 2021, it was 631. However, the consultant’s study presented in November included a forecast of higher spending, though it did not break down by purchasing power. The question is, with rising inflation, those 634 euros do not allow you to make the same purchases as last year.

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