European results Deloitte Xmas study: European consumers worried about impact of austerity measures on their spending power

European consumers plan to spend €587 for year-end festivities, 0.8% lower than last year. Gift vouchers are being criticised by European consumers.
8 November 2011

Brussels, 8 November 2011 – European consumers plan to spend €587 for year-end-festivities, a similar budget compared to last year. However, many European consumers indicate they are starting to feel the impact of the austerity measures on their personal income and expect a decrease in their purchasing power in 2012. Books and money (cash) remain the most desired gifts throughout Europe, while cosmetics/perfumes and chocolates are the items that European consumers are planning to give. European consumers are also adopting modern consumption patterns, such as cross-channel experience: using online as well as offline channels. These are the main European conclusions of the 2011 Deloitte Xmas survey, an annual survey that is conducted this year for the 14th time, investigating the year-end holiday season purchasing intentions among European consumers. The Belgian results of this study will be announced on 29 November 2011.

More than six out of ten European consumers think their country is currently in a recession. Nevertheless, this new "crisis" has yet to affect consumers' perceptions about their spending power, as they readily admit: 4 out of 10 respondents consider that it has remained stable in 2011, and 2 out of 10 even indicate it has increased. In most European countries, the austerity measures and higher tax burdens that have already been announced will not have an impact on household budgets until next year. Koen Neijens, Director at Deloitte Belgium concludes; "Many European consumers, not only in Greece and Portugal, are starting to feel the impact of the austerity measures on their personal income and expect to see a decrease in their spending power in 2012."

Budget maintained for year-end festivities 2011: European consumers plan to spend €587

In 2011, European consumers plan to allocate a budget of €587 on average for year-end festivities, just 0.8% lower than last year. As in the past, consumers will primarily seek to save money on their gift purchases, the main item in the budget. Spending on holiday meals, entertainment and outings will remain stable. The main reason for consumers to spend less, is the expectation that the economic situation will get worse.
Consumenten die verwachten minder te besteden doen dat vooral omdat ze verwachten dat de economische situatie nog verder achteruit zal gaan.

Distinctions across European countries are still pronounced, with the emergence of three main groups:

Top most desired and purchased gifts

Top 10 – Most desired gifts % Top 10 – Gifts planned to give %
Books 48% Cosmetics/Perfumes 53%
Money (cash) 44% Chocolates 40%
Travel 34% Beauty care, massages, spa treatment 36%
Cosmetics/Perfumes 32% Books 35%
Clothes/Shoes 32% Food & drinks 34%
Jewellery/Watches 30% Clothes/Shoes 30%
Gift vouchers 29% Money (cash) 28%
Tickets for theatre/concert/cinema/sport games 26% Jewellery/Watches 28%
Beauty care, massages, spa treatments 26% Gift vouchers 27
Laptops/PC Computers 25% CDs 27%

Key highlights with regards to the most desired and most purchased gifts:

As was the case last year, the key factors in deciding upon purchases for the 2011 holiday season are a preference for products which are useful (priority for 79% of European consumers) and have the best price (priority for 70% of European consumers).

European consumers are already making use of the cross-channel experience

Moving beyond a simplified distinction between online and offline channels, European consumers have opted to make use of both channels at all three steps of their buying processes: searching, comparing and buying.

Consumers use social networks and blogs to find independent information on brands and retailers.

Acceptance by consumers of combining different channels is considerably strengthened by the fact that it offers them the possibility to find the respective advantages of each specific channel. Koen Neijens explains: "Consumers find information online that they are not able to obtain in stores, such as the opinions of other consumers, comparisons of products and prices etc. Conversely, they turn to stores for the ease with which purchases may be returned or exchanged, after-sales services, payment convenience and the pleasure of shopping."