According to the Deloitte’s 14th annual Christmas Retail Survey, published today, just 24 per cent of respondents said they will spend less and 19 per cent said they plan to spend more.
On average, consumers are planning to spend £655 on festivities. This is seven per cent less than last year and when compared to the seven per cent growth the year before, could be interpreted as a 14 per cent drop in confidence.
Tarlok Teji, head of retail at Deloitte, said: “Although this Christmas may be one of the toughest in decades, retailers have been toughing it out for most of the year. We think the talk of Christmas being cancelled is overplayed.
“Retailers will need to understand their consumers better than ever and offer relevant products to take a share of the Christmas wallet.”
According to the survey, however, both retailers and consumers think 2009 will be tough. 83 per cent of retailers and 64 per cent of consumers believe economic conditions in the UK will deteriorate.
Richard Hyman, strategic adviser to the retail practice at Deloitte, said: “What is clear is that 2009 is going to an extremely difficult year. It is possible we may see negative sales growth and this would be too much for some companies. Casualties are likely and these may begin with suppliers to retailers.”
Consumers in the North East feel most pessimistic about the economy, with 82 per cent currently rating it ‘bad’.
78 per cent of consumers in the South East and 76 per cent in the North West feel the same, whilst those in Yorkshire & Humberside feel most optimistic with 10 per cent saying the economy is ‘good’.
Those in the North East are also the most downbeat about prospects for 2009 with 75 per cent expecting the economy to get worse.