Spending 'splurge' unlikely for Christmas

Date: 2nd December 2009

Small retailers are facing a "nervous" wait to see if this Christmas will be successful or not.

This is the view of financial advice website MoneyExpert.com, which has recently noted an increased frugality among UK shoppers.

Pierre Williams, the site's head of research, said that many consumers were looking to cut their festive expenditure as a result of rising unemployment, tight bank credit and other factors related to the recession.

This trend could in turn incentivise retailers to launch price promotions early, instead of waiting for the traditional New Year sales period.

The MoneyExpert.com comments follow news from the Bank of England that Britons reduced their outstanding consumer credit by around £500 million during October - the largest one-month drop in borrowing measured since 1993.

Market researchers GfK NOP also said that consumer confidence fell last month and that shoppers had become less likely than before to make "major purchases".

Mr Williams commented: "Shoppers are waiting to see how low stores will go before committing to Christmas spending and the signs from supermarkets are that a price war is underway.

"Retailers must be nervous. There's unlikely to be the kind of Christmas credit card splurge we've seen in recent years."

Posted by Emily Smith