ICAEW chart of the week: Christmas 2022

Our final chart of 2022 shows how spending on Christmas is expected to fall significantly this year as the cost-of-living crisis takes its toll on family finances.

Step chart showing change in average spending per person on Christmas over the last three years (skipping Christmas 2020).

Christmas 2019: £412

Inflation: +£23
Change: -£9

Christmas 2021: £426

Inflation: +£46
Change: -£79

Christmas 2022: £393

PwC’s annual pre-Christmas survey indicates that spending on Christmas was expected to be below pre-pandemic levels, with average spending of £412 in December 2019 (before the pandemic) increasing to £426 in December 2021, before falling to £393 this Christmas. 

The chart takes inflation into account to provide an illustration of what has happened to average spending in real terms. Excluding December 2020, when Christmas was cancelled for many of us, average spending would have been £23 higher if it had kept pace with inflation of 5.5% over the two years between 2019 and 2021, implying spending was expected to be £9 lower last Christmas than it had been before the pandemic.

The effect is even more marked this year, when keeping pace with consumer price inflation of 10.7% would lead to an extra £23 being spent compared with last Christmas. In this year’s survey, respondents expected to spend much less than in previous years, with an implied reduction of £79 or 17% after taking account of inflation.

We have used the overall CPI index as of November of each year presented in the chart, but in practice inflation runs at different rates for each element of spending. Food and non-alcoholic beverage inflation is currently running at over 16% meaning Christmas dinner is likely to cost even more this year, which for many is likely to offset any real terms ‘savings’ on alcohol where inflation is running at just over 4%.

According to PwC, 50% of spending on Christmas presents was expected to be completed around or before Black Friday in November, while 44% was planned for early to mid-December and 6% to be bought in the last week before Christmas or later. PwC also reports that the majority of Christmas present buying is now done online, with 55% ordered for delivery, 10% through click and collect, and just over a third to be purchased in-store.

Irrespective of how inflation is calculated, what is clear is that there is a substantial reduction in spending on Christmas festivities in 2022. This highlights how household finances are under significant pressure as we come to the end of the third year of the pandemic.

The ICAEW chart of the week is taking a break over the Christmas period and will return in 2023 with new charts on diverse subjects.

This chart was originally published by ICAEW.

ICAEW chart of the week: UK card activity

9 April 2020: Debit and credit cards were used 19.7bn times in 2019, with £722bn spent.

Debit and credit card activity in the UK 2019: 19.7bn transactions for £722bn.  Debit cards 15.6bn for £503bn, credit cards 4.1bn for £219bn.

This #icaewchartoftheweek is on the subject of credit and debit usage in the UK, with UK Finance (the trade body for the banking and financial sector) reporting that £722bn was spent on UK and overseas cards in 2019. This comprised 19.7bn transactions at an average of just under £37 per transaction.

Average spending on credit cards at £53 per transaction was higher than the average of £32 spent on each debit card transaction. As a consequence, credit cards were around 30% of the total spend, but 21% of total transactions.

The number and value of contactless transactions both increased by 16% compared with 2018, as more and more people chose to use this form of payment. The average contactless spend was £9.35 on 8.6bn occasions, in contrast with the £81 spent on each of the 2.7bn online transactions in 2019, and the average of £50 incurred in 8.4bn non-contactless transactions.
Overall spending on credit and debit cards in 2019 was only 0.2% higher than in 2018, even though the number of transactions was up by 7.3%. This provides an indication of the weakness in the UK economy before recent events.
Of course, what we all want to know if what is happening right now. With the country in lockdown, the number and value of transactions are likely to fall significantly. We will be poring over that data as soon as it is made available!

ICAEW chart of the week: retail sales

3 April 2020: the #icaewchartoftheweek is on the subject of retail sales, with UK supermarkets experiencing a 20.5% growth in sales in the four weeks ending on Saturday 21 March 2020 according to Nielsen.

Supermarket sales: £9.2bn 4 weeks to 23 Mar 2019 + £1.2bn 3 more shopping trips +£0.7bn 1 more item per basked = £11.2bn 4 weeks to 21 Mar 2020.

This is dramatic for the sector, with sales in the last week in that period up 43% over the equivalent week last year.

Although newspaper headlines are full of stories about panic buying, the statistics themselves provide a more nuanced perspective. Shoppers each made an additional three visits to supermarkets over the four-week period at the same time as adding an extra item to each basket (up from 10 to 11 items on average), with the average spend per basket increasing from £15 to £16.

Although some of those extra £1s will have gone on stocking up on toilet rolls and pasta, in practice the majority of this additional spending will have simply replaced food and drink previously bought elsewhere, as pubs, restaurants, works canteens and school lunches have all ceased to operate over the course of the last few weeks.

A boom time for supermarkets, but terrible for most of the rest of the retail sector.

This chart was originally published by ICAEW.