The cost of living crisis is biting hard this year as, according to new research from Mintel, over half (54%) of Brits say financial concerns mean they plan to keep a stricter budget this year compared to 2021.

Meanwhile, easier access to credit and/or buy-now-pay-later schemes will prove to be an important boost this Christmas as more than one in five (22%) of consumers expect to pay for more of their Christmas expenses on credit this year; rising to two in five (40%) Brits aged 16-24.

Other cost-cutting behaviours Brits are likely to adopt include limiting the number of people they give Christmas gifts to (33%) and shopping more at discounters (33%).

Almost a quarter (23%) of consumers plan to do more of their Christmas shopping online this year than they did in 2021. Value for money is likely to be behind the plan for 31% of those who describe their financial situation as struggling/in-trouble to do more of their Christmas shopping online.

The online sector is also likely to benefit from last-minute health concerns as Brits endeavour to stay germ-free in the week running up to Christmas with almost half (45%) of consumers planning to limit their time in crowded areas before seeing family.

Overall, Mintel forecasts retail sales by value in November and December (across in-store, online food and non-food) to hit £89.9bn. This represents an increase of 2.1% compared to last November and December when sales reached £88.1bn, with this year’s growth largely driven by inflation. However, total sales by volume are forecast to decline by 4.6% as the market is hit by reduced discretionary spending.

Nick Carroll, Category Director of Mintel Retail Insights, noted, “We’ve long held the view that the festive retail performance is governed more by how consumers presently feel about their finances than how they view the coming year - with consumers willing to make sacrifices to have a good Christmas.

'However, the uncertainty felt by many at present, and for what the coming year may bring, means the wider economic picture will be hard to ignore this Christmas and will govern the spending decisions of most consumers.

“For lower income households, these concerns are likely to be founded in the here and now, with cutting back not a choice but a reality of the present environment. However, promotional activity and the wider proliferation of credit and buy-now-pay-later will help many shoppers manage their Christmas spending.

“While higher income households may find their present situation to be more manageable, their concerns will be focused on 2023 and the pressures the future holds. Regardless of the motivating force, it’s inevitable that a significant number of shoppers will be cutting back this Christmas.”

Christmas 2022 will undoubtedly be a more social affair than recent years, as this year most Brits are keen to get back to festive socialising with only around one-in-ten (13%) consumers saying they plan to host fewer people than in 2021.

However, for those hosting, keeping costs down will be top-of-mind as almost a quarter (23%) of consumers plan to buy more own-brand food and drink products this year and over one-in-ten (12%) say they will limit their use of household cooking appliances this Christmas.

Nick said, “While the number of Brits looking to reduce their energy use during Christmas may seem low, it will translate to millions of consumers looking for energy saving ways to prepare and cook during this festive period.

'Greater demand for and proliferation of alternative cooking devices, such as air fryers, may drive sales for oils, in particular alternative oils like avocado oil.”

(source: Mintel, image: pexels)