The average Irish household plans to spend close to €1,400 in the Christmas run-up, defying predictions that gloom over the cooling economy would damage retailers, a new survey reveals, writes Edward Power.
Three-quarters of respondents say their Christmas outlay will equal or surpass that of last year, when an infusion of "mattress money" freed-up by the imminent demise of the pound fuelled a record €40 billion spree in Dublin alone.
But increasing consumer anxiety is also apparent, according to the survey of 300 shoppers conducted by analysts Deloitte & Touche. Seventy-eight per cent believe the economy has either flat-lined or slumped into recession and 63 per cent are braced for further deterioration next year.
Despite their deepening sense of unease, consumers seem ill-inclined to trim their Christmas budgets however.
Twenty-eight per cent expect to spend more than last year and 46 per cent anticipate spending the same amount. Only 24 per cent intend to spend less.
In the wake of a budget that raised indirect taxation and cut public expenditure, shoppers appear to regard Christmas as a last opportunity to "let off steam", said Mr Brendan Jennings, head of consumer business at Deloitte & Touche. Forty per cent believe the financial position of their own households will worsen in 2003 and one in six feel their job is insecure, the study found. Two per cent are so dismayed by the slowdown they have chosen not to celebrate Christmas at all.
Gifts will account for the bulk of expenditure, Deloitte & Touche said. The average households expects to spend €567 on presents - compared to a mean of €446 in Europe and €561 in the United States. "Socialising" will comprise €280 of average outlay, followed by food and drink (€280) and clothes (€263).
The Irish rank among Europe's most prolific givers of gifts, Deloitte & Touche concluded. The average citizen will give 14 gifts, second in Europe only to the Dutch. But our presents are cheaper, averaging in price at €41 compared to €76 in Germany, which topped the European leaderboard.
Commentators said anecdotal evidence suggested consumer spend continued to rise this year, though the rate of increase is almost certain to lag behind the 10 per cent annual growth levels recorded through the late 1990s.
Anxiety that the downturn might prompt a fall-off in business has been allayed over recent weeks as sales proved unexpectedly buoyant, said Mr Jerry Minihan, spokesman for Dublin Chamber of Commerce.
It is unlikely that retail activity will eclipse 2001 when the phasing out of the £1 encouraged many to spend cash savings in the final days before Christmas. Nevertheless, the anticipated retail slump has failed to emerge, he said.
"The question that must be asked is whether this is because people are letting off steam before tightening their belts in the new year - or whether this is a credit card spree, where many are buying things they simply cannot afford. It may have to wait until January before we have the answer."
