A new study by GlobalWebIndex has unveiled significant ramifications for the drinks industry stemming from perceived increases in the price of groceries across the UK, with 57% of consumers stating they plan to spend less than £50 on alcohol this Christmas.
According to the study of 2,254 consumers who will be carrying out the Christmas grocery shop, 66% estimate their shop will come in over £100 this year, with close to a quarter pre-empting a spend over £200. Given that the vast majority (71%) state their weekly grocery shop is now down to less than £100, this makes the Christmas shop a significant point of investment in the year.
When asked whether this represented a more or less expensive Christmas than 2017, 45% of respondents feel this Christmas will cost them more than last year. Of these, 70% feel this is down to prices increasing – only 20% state it is because they feel they can afford more.
Chase Buckle, senior trends analyst at GlobalWebIndex comments, “There are a number of possible drivers for this behaviour. We have to consider the wider economic climate affecting the consumer; food prices have increased noticeably for many and this will have left many young families prioritising necessities and lowering the drinks budget this year. Equally, the popularity of events such as Stoptober and dry January may have many people thinking twice before investing heavily in drinks over the holiday. ”
The impact on young families
The study delved further into the perceptions of a sample of 735 parents aged 35 and under, of whom 47% will be spending this Christmas in their own family homes. This compares to around 40% who still choose to spend it at either their parents’ home or their partner’s parents’ home.
Less than half (46%) state their salary on its own can cover the cost of Christmas. Surprisingly, when looking for financial support, they are as likely to ask their friends for support (10%) as they are to take out a loan from a bank (9%).
Given the impact of Christmas on their finances, around 2 in 5 young parents state that they have already begun saving money to ensure they can afford the necessities over Christmas.
Do Christmas ads work?
Overall, most consumers will go to their regular supermarket for the Christmas food shop. The study found 18% of consumers would consider shopping with a different supermarket for their Christmas meal. However, of these shoppers, 73% are undecided as to where they will go.
Interestingly, Aldi – famed for its hugely successful Kevin the Carrot TV adverts – has become one of the most popular supermarkets among UK consumers, with 28% planning to visit the supermarket for their all-important Christmas shop. However, the proportion of shoppers who use the store for their weekly shop is 7% higher.
By contrast,12% of consumers ordinarily shop at M&S, a figure that actually rises to 14% when it comes to the Christmas grocery shop. This year the retailer’s Christmas ad centres on their highly successful brand ambassador, Holly Willoughby, a tactic with no small degree of risk attached – just 10% of consumers feel the celebrity featured in an ad stays with them.
Chase concludes, “Christmas is a time we spend with loved ones. It makes sense that while we cut back on the nice-to-haves such as alcohol, we clearly want to go all out when it comes to the food we put on the table, even if it costs us a little more. It’s no surprise that while M&S enjoys a small increase in Christmas shoppers, 76% of our survey respondents want the price of items to be displayed in the adverts they see.”