UK: The Retail Review - Christmas cheer ... or Christmas fear?
Christmas Retail Survey 2005

Welcome to our eleventh annual survey of retail sector confidence. Every year since 1995, Deloitte has carried out this in-depth analysis of the spending habits and the underlying moods of both consumers and retailers ahead of the all-important Christmas period.

We gather extensive consumer data ahead of the main Christmas shopping rush, as well as polling the opinions of a good cross-section of the UK’s retailers. By taking an in-depth look at buying intentions and perceptions across different regions, ages and demographic groups, we have been able to build up a very detailed picture of the retail landscape. This report is just a snapshot of what we’ve found! But it also includes our own views on the retail industry – both in the short-term and across the longer view.

Many people have contributed to this document, and I’d like to thank them all – particularly the retailers who have shared important insights with us over the years. I hope you will find it informative and useful. Certainly the data we collect and the analysis we carry out helps us to understand the underlying dynamics of this vitally important industry in depth, and has contributed to the expertise we provide across so many disciplines in the consumer business sector.

All that remains is for me to wish you all a prosperous and profitable Christmas and New Year, especially in these increasingly tough times, and I hope you find this year’s survey as thought-provoking and useful as the previous ten!

When we started this survey at Deloitte ten years ago, the UK retail landscape looked very different to how it does today. During this period much has changed and one can argue that the last ten years has seen some of the most significant changes ever to impact upon the sector.

In 1995, the majority of top tier UK retailers were long established, publicly quoted businesses operating from tried and trusted store formats. Equally noteworthy is the fact that ten years ago the majority of retailers felt able to classify their customers by a set of relatively narrow, usually socio-economic, guidelines and tailored their offerings accordingly.

A list of today’s top UK retailers looks very different; many of our key retail names are now in the hands of private owners backed by private equity, there are new entrants to our market from overseas who are thriving by bringing new levels of quality and choice to the UK marketplace, and plenty of well known names have disappeared completely from the UK retail scene. Many sectors have consolidated significantly; grocery, electricals, department stores, DIY and music are just some of the sectors where what were once household names have disappeared from our High Streets never to be seen again. At the same time we have also seen the emergence of whole new sectors. The last ten years has seen huge growth for retailers of "Fast Fashion", mobile phones, PCs, discount focussed retailers and of course, retailers selling via the Internet.

We have a choice of fewer retail trading names than we did ten years ago but more selling floor space than ever before. Retail property development has soared and now every major town or city has its own landmark development. City centres have been invested in heavily to attract businesses and shoppers, whilst out of town shopping meccas such as Bluewater and The Trafford Centre are increasingly common and have caused further massive reinvestment in those pioneering centres such as Milton Keynes and the Metro Centre which were once seen as rarities.

So what has been the biggest driver behind this change? Quite simply it has been you, me and everybody else who spends money with retailers. The changes in consumer behaviour over the last ten years have had a seismic impact on how our retailers behave, what they sell us, and how, when, and where we buy it. UK consumers in recent years have been relatively cash (or in many cases credit) rich and high levels of employment coupled with a buoyant housing market have created unprecedented levels of consumer confidence. Additionally, whilst it may be a well worn cliché the world is indeed getting smaller. Since 1995, we have seen a huge growth in air travel out of the UK, driven by the emergence of low cost carriers.

If we ally to this a continued upwards trend every year in Internet access across UK households, it has become increasingly easier to research and shop beyond the traditional local and even international boundaries. Of course none of this comes for free. We have seen numerous studies in recent years which show that the working population of the UK is spending more time at work than ever before and that we are now putting in the longest hours of any of our near neighbours and have become increasingly time poor, meaning that a "convenience culture" has become increasingly prevalent.

These major changes mean that the consumer of ten years ago now no longer exists. In fact it is now increasingly difficult to segment consumers as changes in lifestyle are such that very few people now fit any one clear profile. The Safeway shopper of 1995 might now very well visit a Waitrose supermarket, a Tesco Metro convenience outlet and an Aldi discount store all in the course of the same week. The best retailers of the last ten years have sought to identify their customers and to continually adapt their offering to suit, whilst all the while keeping focussed on the fact that "the average customer" is something which has been consigned to history.

The one constant over the last ten years and throughout time has always been that Christmas is the period when the retail market is put into sharpest focus. We’ve witnessed ten years of almost uninterrupted success for those retailers who have managed to ride the wave of consumer change and confidence. This year the signs are more ominous than ever before and we will see in the coming months which retailers have learned from the last ten years and planned for the future rather than just enjoyed the immediate, and relatively unbroken, good times.

The fact remains however, that the retail sector in the UK is a challenging environment and we believe that a few of the key findings from our studies over the last ten years encapsulate that fact. During this time, retail selling space has increased by over 10% and in that same period our own survey numbers show that the average Christmas spend has risen from £472 to £617, a compound annual growth rate of 3%. Adjusting for inflation and factoring in the price deflation which has benefited consumers in almost every retail sector, this means that we effectively have 10% more space competing for the same amount of spend. A tough environment indeed and one which we predict is going to get tougher still. One thing we can say with confidence is that the next ten years are going to be at least as eventful as the decade just passed.

The Christmas lights always throw the retail industry into the spotlight, and this year the picture is far from sparkling.

It’s hard to believe that less than three years ago – towards the end of the economic boom – retailers were buoyant and everyone was looking forward to seemingly never-ending growth in the High Street. People were spending more liberally than ever before: feeling rich on the back of rocketing house prices, low inflation and low interest rates, and virtually full employment…

Last year the predictions of retail meltdown failed to materialise fully, but there was a noticeable cooling off. And this year predictions are gloomier still. Just 40% of the retailers we questioned are expecting an increase in their sales this Christmas, compared with 65% last year.

Is this just a natural correction after a somewhat unnatural high? Or are we witnessing the results of a much deeper malaise in the UK retail sector?

Certainly some retailers have been riding the wave for a few years. Many have been trading on residual goodwill from the times when they did offer the most exciting products at reasonable prices. But there is a limit to how many times a loyal consumer will re t u rn if their expectations are not matched by the reality of their visit to the store. Concern has been expressed by New Economic Foundation (June 2005) about store formats being very similar resulting in a retail landscape that looks the same in every town.

Some of the so-called ‘specialist’ stores in our High Street are also starting to realise that they may have a specialist range of products, but perhaps they have not yet invested enough in training to provide specialist staff to underpin the shopping experience.

Many retailers are also suffering from overcapacity: too many outlets, and many of them in the wrong places. But the cost and brand implications of radical downsizing are hard to contemplate. And the cost of good quality retail space remains at a premium.

Against this backdrop, consumer behaviour has also changed. People are starting to realise that they have a lot of power in a saturated retail market. They can pick and choose where they buy. They can do their research on the Internet before they even leave home: indeed, they may not even bother to venture out if what they want can be delivered to their door in just a few days.

In our own and other research, consumers also say they want a better ‘shopping experience’. That doesn’t just mean friendly, helpful and well-trained staff, the right products on the shelves, or even rock-bottom prices. People increasingly view shopping as a leisure activity. Some of people’s spending is now discretionary – they buy because it makes them feel good, not because they actually need something.

This subtle shift has been recognised by the more astute in the retail industry. Shoppers feel short of time, but they still want to enjoy the time they spend shopping. And that may mean spending longer in fewer shops.

In very simple terms the next few years will be all about keeping the most profitable customers coming through the doors, and at least maintain, if not increase, the amount they are spending.

Value for money becomes even more important when consumers are more prudent in their spending habits. Although it is important to remember that ‘value for money’ and ‘cheap’ are very different concepts, and consumers will still expect quality and convenience. The best performing retailers have already invested considerable time and effort in overhauling their customer relationship management (CRM) systems to ensure they know exactly what customers expect when they visit their stores. And best-in-class CRM implementations enable retailers to predict, rather than respond to, customer needs.

Supply chains are constantly reviewed and evaluated to ensure that the goods customers want are always readily available and the best retailers work closely with their suppliers to improve responsiveness and quality.

At all levels of retail experienced, able and motivated employees are extremely valuable assets. Retailers need to ensure that they can recruit, retain and develop the best – because poor customer service can lose a customer no matter how efficient the rest of a retailer’s operation might be. Winning retailers will do this by implementing clear career paths, structured training and succession planning, and competitive and flexible benefits packages.

Many retailers have worked extremely hard to develop their brands, and have built strong, trusting relationships with their customers. As consumer spend starts to level off, many retailers have looked to leverage this position and extend their brand to other areas. Nowhere is this more apparent than with the major supermarkets and general merchandise stores who have branched out into areas such as energy, financial services and telecoms. There is still plenty of scope for many more retail organisations to follow this path. But the key to success is careful consideration of the opportunities and, in particular, the likely partners involved.

With new and suitable retail sites increasingly hard and/or expensive to procure, many retailers have had to make the most of their existing estates. Some businesses have undertaken sale and leasebacks or store disposals to raise capital, whilst others have embarked on extensive programmes of store refits and format changes. In order to retain existing customers and win new ones it is vital that retailers make provision for maintaining convenient, fresh and attractive shopping environments.

So if retailers follow these fundamental principles, what will the retail sector look like ten years from now? We’re expecting increased polarisation between the huge ‘destination’ stores like IKEA and the larger stores of the major supermarkets, and the high added-value, niche retailers that look set to increasingly return to the town and city centres.

Along our streets there may be fewer shops and more leisure businesses: cafés, restaurants, service businesses like beauty parlours … and those shops that do survive will offer a more interesting, targeted and rewarding shopping experience.

The best performers – both in and out of town – will have embraced the realisation that there is no such thing as an ‘average customer’ and really cracked their customer segmentation much more effectively, providing clear product and service differentiation for different age groups, and people with different interests and needs. As a result, they will have achieved enviable rates of ‘dwell time’, with customers spending much longer browsing … and spending. In the thriving shops of 2015, staff are likely to be very well trained, with great product knowledge, but great interpersonal skills too. They will look on retail as a career, not just a job you do if you can’t find anything else. But that may mean there’s an interesting demographic shift in the retail workforce, towards more educated, older staff. And it will almost certainly mean paying higher salaries, albeit probably to a smaller overall workforce.

Most importantly, the retailers who survive to 2015 in greatest shape will be the ones who realise that this business is not just about macro-economics. When 80% of consumers claim their Christmas spending intentions won’t be affected at all by rising interest rates, and 90% don’t feel the housing market slowdown will change their plans, the retail industry has to sit up and take notice. Intangible factors, shifting demographics, the need to see customers as people rather than numbers, what your brand says about you… in the fickle world of the consumer, these will be what makes or breaks the retailer.

• Retailers are more pessimistic about the UK economy than consumers, with 58% expecting a downturn in 2006.

• 60% of retailers expect their sales to stagnate or fall this Christmas.

• Consumers are less worried than retailers about the threat of more terrorist attacks in the run-up to Christmas.

• Neither interest rate rises nor the housing market slowdown appear likely to dampen most consumers’ spending plans, although how they spend their money has changed.

• But will the downturn in the housing market, soaring petrol prices, interest rate and inflation uncertainty and the prospect of tax rises next year have an effect?

Both retailers and consumers are notably more pessimistic about the UK economy this year than they were 12 months ago, although in line with previous years’ surveys, consumers seem to remain somewhat less gloomy than the retailers.

58% of retailers we questioned believe that the UK economy will deteriorate next year compared to 43% last year, and only 6% are expecting an improvement.

Consumers remained a little more optimistic than the retailers, although only 15% think the economy will improve next year compared to 19% in 2004. A similar proportion to last year (43% this year versus 45% last year) believe it will remain unchanged.

Consumers are likely to be influenced by uncertainty about interest rates and the stagnant housing market, soaring petrol prices and utility bills, and inflation (currently standing at its highest level since the Consumer Price Index of measurement was introduced in January 1997, at 2.4%), as well as the prospect of tax rises in 2006.

The general despondency in the economy is reflected in expectations for Christmas sales, with 60% of retailers expecting them to stay the same or deteriorate, compare d with 35% last year. The proportion of retailers expecting improved sales has dropped dramatically, from 65% last year to 40% this year. This gloom and doom is borne out in Nationwide’s recent monthly consumer confidence figures, which fell to its lowest level since it began in May 2004*.

*Source: Nationwide "Consumer Confidence Falls", November 2005.

As widely reported, the majority of retailers are suffering during the current consumer downturn. 81% of those we surveyed have suffered a reduction in like-for-like sales, and of these only 6% have started to see a recent improvement in results.

36% anticipate an improvement in the next three to six months, but 39% expect to wait more than six months, which does not bode well for Christmas revenues.

The possibility of terrorist attacks is adding to retailers’ worries about how to tempt consumers into their stores, with 42% concerned that this may have an impact on the Christmas season. Hopefully, these fears will prove unfounded.

Consumers appear less concerned about the threat of attacks, with only 10% saying it might affect them. The region with the greatest concern, not surprisingly, was London.

The interest rate movement from 3.5% in July 2003 to 4.5% in August 2005 does not appear to be significantly affecting consumers’ plans this Christmas.

80% of the people we polled confirmed that the changes in interest rates will not affect how much they will spend.

This compares to 75% last year, perhaps as a result of the interest rate cut in August this year. However, among younger people the picture was rather different. 30% of 15-24 year olds and 28% of 25-34 year olds said their Christmas spending may be affected by the change – perhaps because they are trying to save or pay for their first homes.

More consumers in the South West and North East said they would be affected than in the South, Yorkshire and the North West.

The housing market slowdown appears to be having even less effect than interest rates on people’s spending plans. 90% of consumers say it will not make a difference to how much they intend to spend at Christmas, with men in our survey less affected than women.

Those retailers hoping that Santa will bring a major upturn in trading fortunes are likely to be disappointed. As the Christmas period descends, consumers have little to celebrate, at least with respect to their finances.

Many people will find that they simply have less extra money to spend than usual. Rising oil prices have pushed up utility bills and petrol prices, squeezing the amount of money left for more discretionary purchases like Christmas presents.

Of course, those feeling strapped for cash can always borrow money instead. But households have recently been exercising more caution when it comes to resorting to their plastic. Bank of England data shows a slowdown in the growth of consumers’ unsecured borrowing. Borrowing on credit cards has risen by an average of £0.4bn a month over the last four months, half its average rise over the previous year. Although interest rates are lower this Christmas than last, the continued rapid build-up of debt has meant that interest payments are still higher than last year. Moreover, lower interest rates have not altered the fact that the debt also needs to be repaid at some point. And with household debt still rising further above the £1trillion mark last year, a slowdown in borrowing is arguably long overdue.

Even if they do have the money to spend, consumers are likely to be rather more careful with it, given that they will be feeling less wealthy than over the past few Christmases. Although there have been signs that the housing market could be stabilising, the best homeowners can hope for is that house prices stand still rather than fall. As Chart 1 shows, this is a far cry from last Christmas, when homeowners were enjoying price rises of 15% or so a year.

Meanwhile, until recently, one bedrock of support for household spending had been the labour market. But that has started to change with the number of people claiming unemployment benefit having risen for the last eight months in a row. The unemployment rate still remains low by historical standards, but Chart 2 shows that households have become more sensitive to the risk of further job losses as economic growth slows. As such, they might be more care f u l about ensuring they have some money put away for a rainy day. All of which suggests that consumers are likely to become even more price sensitive, meaning that pre-Christmas discounting – an increasingly common phenomenon in the last few years – will be as important as ever for retailers trying to attract footfall in their shops. One area likely to benefit from greater price consciousness, though, is online sales, with consumers turning to the Internet to find the best bargains.

Overall, according to Office for National Statistics data we are still a long way from the ‘retail recession’ of the early 1990s: after all, although spending growth has slowed, sales volumes are not falling outright. Nonetheless, it is certainly set to be a tough Christmas, which will set the tone for the year ahead.

One of the most interesting trends suggested by this year’s data is that people’s behaviour may be changing: buying large and expensive presents may be going out of fashion, with people looking to spend more of their money on the whole Christmas experience: entertaining friends, good food and drink, socialising, decorating their houses… However, all the talk about people tightening their belts does appear to be being translated into hard fact. For the first time in the ten years we have been producing this survey, we are not predicting a substantive overall increase in Christmas spending.

Our survey may show a very slight rise in the headline Christmas spending figure of 0.2%, but this doesn’t take inflation into account. What’s more, there is a perceptible fall in the amount people plan to spend on gifts, of -2.8%. The only significant increase is likely to be in socialising.

Despite our prediction that spending on gifts is likely to fall, the simple numbers reflect a much more complex picture. People now expect to get much more for their money as there is intense competition and even price deflation in some key areas for gift purchases such as consumer electronics and clothing.

Women appear to be more generous than men when it comes to buying presents. They plan to spend an average of £323, compared to men who will spend £296, although this is probably because women do most of the gift buying for extended family and friends, whereas men tend to concentrate on their spouse and immediate family.

Not surprisingly, 35-44 year olds are planning to spend the most on gifts this year (an average of £419 each), with 23% of this age group planning to spend between £500 and £1,000. By contrast, our 1995 survey showed the 25-34 age group to be the highest spending perhaps reflecting the demographic shift towards having children later.

The Welsh plan to be the most generous, spending an average of £359 on gifts, compared to consumers in East Anglia who are only intending to part with £266. The second highest spenders on gifts are the Scots, at £356, an increase of 3% from 2004, going against the time-worn cliché! The biggest increase in spending on presents is in the South: 20% higher than last year. However, Yorkshire consumers are tightening their belts significantly and expecting to spend less than the previous year on gifts this Christmas.

Consumers indicated that they will be spending slightly more this year on food and drink than they did last year. Continued price deflation in the food sector over the past 12 months is good news for consumers as they are now getting more for their money than they were 12 months ago. The slight increase in spending may also reflect changing consumer moods, with more people buying higher cost organic or quality brands in response to food scares, or choosing to entertain at home more.

Overall, 78% of consumers say they will spend the same on food and drink over the festive period, with 13% expecting to spend more than last year and 8% planning to spend less.

Men plan to spend an average of £168 on food and drink; slightly more than women, who plan to spend £154. And once again the biggest spenders are the 35-44 year olds (with an average spend of £202), with people aged over 65 planning to spend the least.

Those intending to splash out most on food and drink live in the North East, where they will spend £178, compared to just £119 in East Anglia. This regional variation reflects a long-term trend, as we reported similar results in our 1995 survey.

Perhaps as a reflection of a change in the underlying mood in the country, consumers are planning to increase the amount they spend on socialising this Christmas. This could be a final fling before they tighten their belts, or a shift in attitudes towards spending money on themselves and others to enjoy the whole Christmas experience – especially when many people now seem to have everything they could want or need, and are increasingly hard to buy for!

The expected spend on socialising has increased by 5.9% this year, to an average of £144, although in real terms this only translates as around the cost of two to three pints of beer or glasses of wine!

Men plan to pay out more than women, but the amount women will spend on socialising has increased, by £19 from last year. Overall 73% of consumers plan to spend the same on socialising as last year.

The most sociable people seem to be the 35-44 year olds, who plan to spend an average of £168 on socialising. By contrast, people aged 65+ are only planning to spend £94 over the Christmas period. By far the highest proportion of people saying they will spend more on partying this year is in the 15-24 age group (28%). The North East appears to be the most sociable of the regions, planning to spend an average of £184 per respondent over the celebratory period, compared with just £108 in the South.

Just who owns the UK retail sector? A decade ago the answer would have been relatively straightforward: many large, respected, listed companies, and a dwindling number of smaller independents. Today that question is harder to answer as a growing number of retail brands have been snapped up by private equity – funded both from within and outside the UK.

There’s nothing wrong with that in principle. Although private equity (PE) houses are seen by some as aggressive asset-strippers, PE can be a very effective model for growing shareholder value. But until fairly recently, PE didn’t see the retail sector as particularly attractive because of the high operational gearing and fixed costs associated with the sector. However, the consumer boom helped to change all that. Astute PE operators saw that it was just as possible to take on and improve underperforming businesses in the retail sector as in any other, and rapidly transform top line improvements into bottom line profit.

This happened very successfully with several well-known but faltering UK brands, including BHS, Homebase, and Halfords and this explains why there has been interest in some of the other big High Street names who have apparently lost their way in recent times. Private capital has also been teaming up with funders to buy slices of the UK retail landscape: the Barclay Brothers, Tom Hunter, Philip Green and Baugur are all familiar names linked with rescue plans for ailing giants. The recently announced Peacocks deal marks the entry of hedge funds to the sector.

But it’s not just the large, tired retailers that attract private equity. Many see great potential in new and exciting, niche brands with significant growth potential. And brand is all-important in the retail sector, above all else. Brand equity, and its potential for extension, is crucial in merger and acquisition (M&A) opportunities.

Interestingly, listed UK retailers seem to struggle to manage more than one brand – it requires so much focus – but free from the demanding quarterly reporting restraints, perhaps private equity has more flexibility to take a longer-term view, to experiment and develop brands in a more strategic way… at least as long as the funding is there and the banking covenants are met!

However, as the rest of this document so clearly underlines, trading on the UK High Street is very tough at the moment. Hence the number of deals has fallen off in the past few months, partly due to reduced appetite from the debt providers. PE has turned its attention to other pastures (while retail is stagnant, the leisure industry is undergoing something of a boom in terms of M&A activity).

" Astute PE operators saw that it was just as possible to take on and improve underperforming businesses in the retail sector as in any other, and rapidly transform top line improvements into bottom line profit."

When consumer confidence and spending levels recover we are likely to see more PE deals in two distinct categories. Firstly, smaller deals where there is a strong brand with real UK roll-out potential and secondly, larger deals where there is perceived underperformance which can be corrected with new management and investment. We fully expect the number of corporate finance deals in the retail sector to pick up again, although not at the same level as recently and it may well be private equity and the entrepreneurs who breathe some life back into the industry.

Generosity unwrapped The psychology of giving ... and receiving

• Most people would like to receive traditional types of gifts at Christmas: with cosmetics, books, CDs and clothes topping the wish list for women, and CDs, DVDs and books for men.

• Under 12s are asking for computer games and consoles, as well as more traditional types of toys, but there’s no one single, ‘must-have’ toy or gift for children this Christmas.

• A large proportion of us will get what we wanted: traditional gifts top the list of what most consumers are planning to buy.

• Men are planning to splash out on their partners, whereas women are just as likely to buy the most expensive presents for their daughters.

In this age when it seems increasingly hard to find the perfect gift, despite the plethora of choices, traditional options often appear to be most in demand, especially among women. Our survey shows they would generally like to receive music CDs/tapes, books, cosmetics/fragrances, clothing, jewellery, gift certificates, holidays, homemade gifts and theatre tickets, and whilst men would also like to receive these, they seem to favour sports/games and electrical equipment more than women.

Many people’s traditional image of Christmas includes a pile of expensive toys for the children – often acquired after long hours queuing for the must-have Telly Tubby/Cabbage Patch Doll/Raleigh Chopper. … But over the past few years the dominance of traditional toys as gifts – even for relatively young children – has waned considerably. As our survey shows, 25% of consumers buying gifts for a child under 12 are hearing most about computer or games console-related presents this Christmas. Of this 25% of consumers, 4% are being asked specifically for the Sony Playstation Portable (PSP).

When it comes to toys, the B Daman Tournament Set– a playground craze that combines action figure fantasy with headto- head competition – Baby Annabell, Barbie Pegasus, and Bratz Rock Angels are likely to be on many Christmas lists. Also popular are Roborapter (a companion to last year’s popular toy, Robosapien) and Darth Vader Voice Changer Helmet.

The good news for parents is that once again our survey shows, as it has in the past few years, there is not likely to be a single, overwhelming winner in the Christmas toy race this year. The bad news is that the other big hit of the festive season is likely to be the Crazy Frog ring tone, along with other mobile phone-related paraphernalia! So stock up with earplugs in plenty of time for Christmas.

In line with previous years’ findings, the majority of consumers tend to buy similar presents to those they would like to receive themselves. 75% say they plan to buy music CDs or tapes for friends and family, and this rises to 86% of 35-44 year olds.

Women are likely to buy traditional gifts such as books, toys, cosmetics, clothing, food and drink, jewellery and gift certificates. Many men will also buy these kinds of gifts, but are more likely to buy more sports and electrical equipment than women.

Older consumers are more likely to give books as gifts (64%), whereas younger people in the 25-34 age bracket are much more likely to give home furnishings (28%) and home-made gifts (26%) than the national averages for these types of gifts (19% and 17% respectively). And 15-24 year olds are much more likely to give mobile phones or phone accessories than the rest of the population.

Depending where you live in the country, you could receive very different types of presents this year. For example, in the South West, be prepared to write thankyou letters for clothes, food and drink, and home furnishings; whereas if you’re a DIY enthusiast living in Scotland you could be disappointed, as only 9% of gift buyers are planning to give DIY goods.

Present givers in the North West are the most likely in the country to buy sports goods, chosen by 45% compared to just 22% in the South. On the other hand, people in the South are the most likely to make gifts for Christmas, with 25% of consumers saying they will do so, while East Anglians are least likely to make their presents.

Reflecting previous years’ trends, 23% of all consumers and 29% of men buy the most expensive gifts for their spouse or partner. But women are actually more likely to splash out on their daughters than their partners. And more men than women (11% compared with 7%) will spend the most on their mothers.

Within the 25-34 age bracket, 35% of people will spend most on their partners – perhaps because they want to impress during a first flush of romance, or they don’t yet have demanding older children to buy for! And a much higher than average 36% of 15-24 year olds will buy the most expensive present for their mothers, with many not yet sufficiently settled in a relationship to splash out so much on their partners.

The lowest proportion of consumers planning to buy the most expensive gift for their partner is found in the North West (just 13% compared to the national average of 23%): but where partners lose out here, Mums gain. By comparison, people in the South West are much more generous to spouses/partners and their children, with mothers here getting fewest of the most costly presents.

Married consumers are also less likely to spend most on their partners than those who are just living together (38% compared to 53%).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.