Price sensitivity further increases as consumers prepare for the year-end holiday season

Brussels, 22 November 2012 – Today, Deloitte announces the Belgian conclusions of the 2012 Deloitte Xmas survey, an annual survey that is conducted for the 15th time, investigating the year-end holiday season purchasing intentions among European consumers. Compared to previous years, price sensitivity has further increased in Belgium. Almost 4 out of 10 Belgian consumers indicate they will buy less expensive gifts for the holidays. Cash comes first on Belgians' wish list for year-end most desired gifts, but gift vouchers will be the gifts offered most. The survey also shows that Belgian households intend to spend € 559 during the year-end festivities, which is the lowest level of expected spending since the economic crisis emerged in 2008. More than their European peers, Belgian consumers remain faithful to physical stores: Ecommerce and M- commerce in Belgium lags behind compared to other European countries.

Approximately half of Belgian consumers consider our country to be in recession and believe the economy will be in recession in 2013 as well. Consumers also have negative expectations around the evolution of their purchasing power in 2013. Koen De Staercke, Deloitte's Partner in charge of the Retail & Consumer Goods business, adds: "In the end it doesn't even matter whether there technically is a recession or not. Consumer perception is essential. An economic climate with a lot of uncertainty leads to consumers with "defensive" behaviour. Consumers will carefully look at their budget, analyse where they can cut back spending, specifically look for price promotions and avoid impulsive buying. This survey was conducted mid-September, just before various enterprises in Belgium announced large dismissals – it is clear that we are not looking towards an upturn in this negative sentiment any time soon."

Price reconfirmed as the decisive factor for Belgians when purchasing year-end gifts

Price sensitivity has further increased in Belgium. This is visible in many different ways. Belgian consumers indicate that they will more likely buy less expensive gifts this year and that they will focus on products and gifts that are offered with a discount.

More consumers than last year indicate they will shop less at stores they consider expensive. When asking consumers what retailers' top priority should be they refer to price-investments as the most important investment.

In 2011, Belgians expected to spend € 574 whereas actual spending per household was only € 544. Today, Belgian households expect to spend € 559 during the 2012 year-end festivities, which is the lowest level of expected spending since the economic crisis began in 2008. € 286 of this planned budget will be spent on gifts, € 204 will be taken up by food and drinks and Belgians plan to use € 69 of the budget for social activities during the end-of-year holidays.

An expected spending level of € 559 implies an increase of 2,7% compared to the actual spending of last year. Inflation in October was 2,8%. This means that our expected spending level will be in line with last year after adjusting for inflation.

Belgian consumers indicating to cut back on spending (also during the year) first look at their budget for holidays, clothing and leisure activities. They will however not cut back on primary needs such as health care, housing and essentials. Koen De Staercke: "1 out of 3 Belgian consumers indicated they had to pay higher energy bills and that they spent more money on groceries compared to previous years. Many consumers carefully look at their household budgets and make important trade-offs. Holiday budgets, clothing budgets and budgets for leisure are top of consumers' minds when they cut back spending."

Belgians want cash, but receive… gift vouchers

Money, books and gift vouchers are the top 3 desired gifts in 2012, similar to last year. Even if cash is still on the top of Belgians' wish list, it is not among the most likely gifts to offer. Belgians are more likely to receive a gift voucher under the Christmas tree, as 38% of the respondents say they plan to buy it for their loved ones this year – pushing cosmetics and perfumes off the first place of planned gifts.

Top 3 - Most desired gifts in Belgium 2012 2011
Money (cash) 47% 44% (1)
Books 39% 40% (3)
Gift vouchers 37% 42% (2)

Top 10 - Gifts planned to give in Belgium 2012 2011
Gift vouchers 38% 47% (2)
Books 33% 31% (7)
Cosmetics/perfumes 22% 50% (1)

Compared to 2011, the percentage of non-conversion of gift vouchers has dropped substantially and is now at 7% in Belgium, which is in line with the European average. Consumers seem to be paying more attention to use their vouchers than was the case in the past. The main reason for not using gift vouchers is the mismatch between what consumers actually want and the products or services offered via the voucher. This is cited by almost half of the people who didn't use their voucher(s).

E-commerce and Mobile commerce are growing segments but Belgium lags behind

Belgians are more than their fellow Europeans attached to physical stores when it comes to buying products. 85% of Belgians prefer to buy in shops compared to an EU average of 66%. Compared to other European countries, Belgium continues to lag behind when it comes to buying via the internet through either E-commerce shops or through M-commerce.

In particular, the use of mobile phones for purchases is still limited in Belgium. See pdf for graph and more detailed information.

Koen De Staercke explains: "A very low percentage of Belgian consumers has used their mobile phone to purchase on the internet compared to other European consumers. Also the number of Belgian consumers who expect to use their mobile phone in the future for purchasing is significantly lower than in other countries. It is a pity we lag behind. M-commerce is without doubt a growing market. We risk not seizing all opportunities here."

For nearly a third of consumers, increased payment security is the main obstacle preventing to buy more via mobile phone. Surprisingly, payment security is more of a concern in the minds of younger consumers than for older consumers. Having better internet access was cited as the second most important reason that could stimulate M-commerce.