2021
9
UK Christmas Gift Buying Market Report 2021
2021-03-12T03:53:02+00:00
OX1042543
2195
135514
[{"name":"Seasonal Holidays","url":"https:\/\/store.mintel.com\/industries\/retail\/seasonal-holidays"}]
Report
en_GB
“Christmas 2020 was unlike any other, with the COVID-19 pandemic causing dramatic online growth and store closures and concern around visiting stores meaning significant declines of in-store footfall. These two…

UK Christmas Gift Buying Market Report 2021

£ 2,195 (Excl.Tax)

Description

Providing the most comprehensive and up-to-date information and analysis of the UK Christmas Gift market, including the behaviours, preferences and habits of the consumer.

It probably isn’t surprising that there was an increase in online shopping during Christmas of 2020. Lockdowns either side of Christmas massively limited people’s ability to shop at retail outlets, forcing many into buying christmas gifts online. Overall, there was a 77% drop in in-store shopping, with online Christmas gift shopping rising by 85%.

This spike in online gift shopping was circumstantial in many ways, with most non-essential shops remaining closed due to lockdown restrictions. To continue trading, many previously offline businesses moved online to continue trading, as well as click-and-collect orders. With 63% of shoppers missing in-store gift shopping, there is a longing for a ‘normal Christmas’ by many across the UK. While grocery footfall predicted to rise as non-essential shops reopen throughout 2021, continued restrictions may see a prolonged trend in online shopping. This could mean that the change in the way people shop for Christmas gifts online could last into the longer term.

There has been a polarisation in finances, with lower income households losing money while higher income households reportedly being better off than a year ago. While retail sales fell to 0.3%, there has been a sharp increase in the number of people buying during Black Friday sales, 69% of which were Christmas gifts.

Quickly understand

  • The impact of COVID-19 on Christmas shopping habits and the macroeconomic picture in the lead-up to Christmas 2020.
  • Black Friday and online performance.
  • Retail sales performance by major category and by leading retailers who have reported results.
  • Key trends and innovations during Christmas 2020.
  • Who gifts were given to during Christmas 2020 and how they were given.
  • What gifts were purchased and how much on average was spent on gifts.
  • When gifts were purchased and in which month the most was spent.

Covered in this report

Food Brands: Tesco, Asda, Sainsbury’s, Hotel Chocolat, Lidl, Booths, Aldi, Central England Co-Op, Morrisons, M&S Food

Non-Food Brands: B&M, Boohoo, ASOS, Seasalt, JD Sports, Next, Sosander, Joules, N Brown, Matalan, M&S, Superdry, Primark, Burberry, Kingfisher (B&Q, Screwfix), ProCook, Topps Tiles, Dunelm, Dixons Carphones, Selfridges, Westfield, Carnaby Street, John Lewis & Partners, The Hut Group, Feelunique, Pets at Home, Gear4Music, Halfords, Studio Retail, Very, Poundland

Gift / product types: DIY, furniture, health and beauty, food and drink, jewellery, household appliances, textiles, audio, video, music, video games and consoles, gift cards, clothing, footwear, toys and games, cash, floor coverings, electronics, books, experiences, charitable donations

Expert analysis from a specialist in the field

Written by Nick Carroll, a leading analyst in the Retail sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Christmas 2020 was unlike any other, with the covid-19 pandemic causing dramatic online growth and store closures and concern around visiting stores meaning significant declines of in-store footfall. These two trends conspired to see online, for the first time, take a majority of non-food spending in q4, a dramatic statistic that serves to highlight the underlying difficulties facing physical retail at present. We must, however, remember a good deal of this online purchasing was forced upon consumers, and that a majority of consumers missed the usual physical shopping experience – hopefully providing a platform for store sales to bounce back strongly in 2021.

Nick Carroll
Associate Director of Retail Research

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on retail
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on retail, 26 February 2021
    • The market
    • The economic realities of COVID-19 serve to dampen demand
      • Figure 2: The Financial Confidence Index, January 2015-January 2020
    • The pandemic has caused a schism in finances
      • Figure 3: Changes in current financial situation, December 2020
    • Given the backdrop, retail sales held up in November and December
      • Figure 4: November and December combined retail sales growth, in value and volume, non-seasonally adjusted, 2016-20
    • Grocery and online were the drivers of this growth
      • Figure 5: November and December combined retail sales growth by major categories, in value and volume, non-seasonally adjusted, 2020
    • Black Friday grows and is key in gift purchasing
      • Figure 6: Black Friday 2020 behaviours, December 2020
    • Online hits record highs
      • Figure 7: Non-food sales, percentage accounted for in-store and online and other non-store channels, Q4 2018-20
    • The consumer
    • Significant uncertainty as to how gifting would hold up moving into Christmas…
      • Figure 8: Pre-Christmas 2020 attitudes: budgeting for Christmas 2020, by household income, October 2020
    • …but overall gifting and spending held up well
      • Figure 9: Average spent on Christmas gifts in 2020, January 2020 and 2021
    • Polarised finances play out in gift spending
      • Figure 10: Changes in spending on Christmas gifts, by household income, January 2021
    • Fashion gifting holds up well, despite wider challenges in the category
      • Figure 11: Products purchased as Christmas gifts, 2019 and 2020
    • Consumers started purchasing earlier…
      • Figure 12: When gift buying began, 2019 and 2020
    • Spending falls out of December and into November and October
      • Figure 13: When the most was spent on Christmas gifts, 2019 and 2020
    • Significant concern served to limit in-store footfall…
      • Figure 14: Attitudes to Christmas shopping in 2020, January 2021
    • …however a majority missed the atmosphere of physical shopping, boding well for 2021
      • Figure 15: Christmas 2020 behaviours, January 2021
  3. Issues and Insights

    • Impact of COVID-19 on Christmas gift giving
    • How physical shopping can bounce back next Christmas
  4. The Market – Key Takeaways

    • Overall retail sales held up relatively well despite COVID-19
    • Online soars giving Black Friday an even better chance to shine
    • Demand in December holds up, but is stilted by restrictions and earlier purchasing
  5. Market Drivers: The Lead-Up to Christmas 2020

    • A Christmas like no other
      • Figure 16: COVID-19 Tracker: level of concern about exposure to COVID-19, number worried/extremely worried about exposure, Feb-Dec 2020
    • Given the circumstances retail sales held up relatively well in 2020…
      • Figure 17: Retail sales growth, non-seasonally adjusted, by major category, Jan-Dec 2020
    • …although grocery and non-foods experience very different years
      • Figure 18: Retail sales growth, first lockdown (April-May 2020) and 2020 overall, 2020
    • Online hits record highs
      • Figure 19: Online sales as a percentage of all retail sales, by major category, Nov 2019-Dec 2020
    • The economic realities of COVID-19 serve to dampen demand
      • Figure 20: The Financial Confidence Index, January 2015-January 2020
    • The pandemic has caused a schism in finances
      • Figure 21: Changes in current financial situation, December 2020
  6. Retail Sales Performance

    • Demand held up better than expected given the circumstances…
      • Figure 22: All retail sales (excluding fuel) growth in December, in value and volume, non-seasonally adjusted, 2016-20
      • Figure 23: Retail sales growth, ONS vs BRC, Oct 2019-Dec 2020
    • …particularly if we look at the full picture
      • Figure 24: November and December combined retail sales growth, in value and volume, non-seasonally adjusted, 2016-20
      • Figure 25: November and December combined retail sales growth by major categories, in value and volume, non-seasonally adjusted, 2020
    • COVID-19 serves to shift more non-food demand into November
      • Figure 26: Final quarter months as a % of all non-food retail sales (ex-fuel), by volume, in the final quarter, 2018-20
  7. Black Friday

    • A very different November
      • Figure 27: November and November plus December, value retail sales growth, non-seasonally adjusted, 2019-20
    • Black Friday moves even more online
    • 42% purchase items during Black Friday
      • Figure 28: Any Black Friday purchase, by household income, 2019 and 2020
    • Purchasing patterns mirror that of 2020 as a whole
      • Figure 29: Products purchased during Black Friday, 2019 and 2020
    • Amazon the dominant force on Black Friday
      • Figure 30: Retailers shopped with on Black Friday 2020, December 2020
    • Over two thirds used Black Friday to buy Christmas gifts
      • Figure 31: Black Friday 2020 behaviours, December 2020
  8. Online

    • The most online Christmas yet
      • Figure 32: Q4 Online retail sales growth, non-seasonally adjusted, and online as a % of all retail sales, 2018-20
      • Figure 33: All online sales, split by type of retailer, 2018-20
    • Grocery the fastest-growing online channel in 2020
      • Figure 34: Store-based online grocery sales growth, non-seasonally adjusted, and as a % of all grocery sales, Oct 2019-Dec 2020
    • More gifts purchased online than ever before
      • Figure 35: Online and in-store, value sales growth, non-seasonally adjusted, March 2020-December 2020
    • For the first time more non-food sales were made online than in-store in Q4
      • Figure 36: Non-food sales, percentage accounted for in-store and online and other non-store channels, Q4 2018-20
  9. Leading Retailers – Key Takeaways

    • Grocery holds up despite late change to Christmas restrictions
    • Non-food a mixed performance with online capabilities a key differentiator
    • Virtual and COVID-19 safe shopping experiences try to whip up some Christmas spirit
  10. Retailer Christmas Performance

    • Retail sales performance by sector
      • Figure 37: Retail sales by sector, year-on-year non-seasonally adjusted value growth, November/December and 2020 overall
    • Reported retailers’ results
    • Grocers: steady demand with a focus on local
      • Figure 38: Grocery: sector and reported retailer sales, Christmas 2020
    • Fashion: an online first festive period
      • Figure 39: Clothing and footwear: sector and reported retailer sales, Christmas 2020
    • Mixed goods: discounters benefit from essential status
      • Figure 40: Mixed goods: sector and reported retailer sales, Christmas 2020
    • Household goods: the growth area
      • Figure 41: Household goods: sector and reported retailer sales, Christmas 2020
    • Miscellaneous specialists
      • Figure 42: Miscellaneous specialists reported retailer sales, Christmas 2020
  11. Trends and Innovations for Christmas 2020

    • Local businesses receive support once more…
    • …both online…
      • Figure 43: Click It Local independent support, 9 December 2020
    • …and physically
      • Figure 44: Selfridges Market on the Mews, 2020
    • Retailers experiment with virtual Christmas shopping
      • Figure 45: Selfridges Christmas display in 2020
      • Figure 46: Carnaby Street 360-degree tour, 2020
      • Figure 47: John Lewis virtual Christmas shop tour, 2020
    • Retailers support shoppers from a safe distance
    • Selfridges and Royal Mail team up again
      • Figure 48: Selfridges and Royal Mail pop-up, 2020
    • Morrisons teams up with Deliveroo to deliver Christmas essentials
      • Figure 49: Morrisons luxury Christmas box, 2020
    • Westfield opens first Christmas rental pop-up store
      • Figure 50: A Very Rental Christmas pop-up, 2020
    • Celebrating together, apart
      • Figure 51: Jo Malone video gift messaging, February 2021
  12. Advertising and Marketing Activity

    • Advertising spend falls 16.2% in 2020
      • Figure 52: Recorded above-the-line, online display and direct mail total and annual change in spending by retailers on advertising during Q4, 2016-20
    • Amazon top advertising spender
      • Figure 53: Leading retailers’ spending on recorded above-the-line, online display and direct mail advertising, October-December 2020
    • 37.6% of spend takes place in Q4
      • Figure 54: Leading retailers’ spending on recorded above-the-line, online display and direct mail advertising, Q1-3 and Q4 split, 2020
    • Digital and TV increase as advertising moves indoors
      • Figure 55: Recorded above-the-line, online display and direct mail advertising spend by retailers, by media type, Q4 2020
    • Supermarkets lead above-the-line spending
      • Figure 56: Recorded above-the-line, online display and direct mail advertising spend by retailers, by advertiser type, Q4 2020
    • Key campaigns
    • Sports Direct’s first Christmas campaign
      • Figure 57: Sports Direct Christmas campaign
    • Tesco encourages customers to treat themselves
      • Figure 58: Tesco’s No Naughty List advert 2020
    • Amazon’s “The Show Must Go On”
      • Figure 59: Amazon’s Christmas advert, 2020
    • Boots – What the World Needs Now
      • Figure 60: Boots Christmas advert, 2020
    • Waitrose & John Lewis – Give a Little Love
      • Figure 61: Waitrose & Partners Christmas advert, 2020
    • Nielsen Ad Intel coverage
  13. The Consumer – Key Takeaways

    • COVID-19 drives gift buyers online
    • Average spend holds up but purchasing skews earlier
    • Supporting local and British businesses important and the atmosphere on the high street was missed
  14. Impact of COVID-19 on Christmas 2020 Shopping Habits

    • Pre- and post-Christmas views
    • Significant uncertainty moving into Christmas 2020
      • Figure 62: Pre-Christmas 2020 attitudes: budgeting for Christmas 2020, by household income, October 2020
    • Pre-Christmas the focus was making sure that seeing family was possible
      • Figure 63: Pre-Christmas 2020: attitudes towards seeing family, shopping in-store and online, October 2020
    • Additional online shopping increases in the final months of the year
      • Figure 64: COVID-19 Tracker: Online and in-store shopping behaviour, Apr-Dec 2020
    • Shoppers missed the usual Christmas atmosphere
      • Figure 65: Christmas 2020, COVID-19 impact on shopping atmosphere, by age, January 2020
  15. Who Gifts Are Given To

    • 86% of consumers gave Christmas gifts in 2020
      • Figure 66: Total number of gift givers, Christmas 2019 and 2020
    • Small number cut back on gifting to extended family/friends
      • Figure 67: Who Christmas gifts were given to for Christmas 2019 and 2020
    • Restrictions naturally had an impact on gift giving
      • Figure 68: Impact of not seeing friends/family on gift giving, January 2021
    • Family households have the widest repertoire to buy for
      • Figure 69: Repertoire of the number of recipients Christmas gifts bought for, January 2021
  16. How Gifts Were Bought

    • Online sees a significant uptick in 2020
      • Figure 70: How Christmas gifts were bought, 2018-20
    • Online gift shopping appeals to older demographics
      • Figure 71: How Christmas gifts were bought, by age group, 2019 and 2020
    • Some online demand driven by distanced gift giving
      • Figure 72: Christmas 2020 behaviours, direct sending and gift wrapping, January 2021
    • Longer-term online retailers need to do more to enable distance giving
      • Figure 73: Attitudes towards online gift wrapping, by age group, January 2021
  17. How Much Was Spent

    • Average spend creeps up despite over a quarter holding back spending
      • Figure 74: Average spent on Christmas gifts in 2020, by age, January 2020 and 2021
      • Figure 75: Christmas 2020 behaviours: Limiting spending, January 2021
    • Economic impact of COVID-19 causes more lower-income households to hold back
      • Figure 76: Changes in spending on Christmas gifts, by household income, January 2021
    • Family spending holds up well, particularly those with older children
      • Figure 77: Average spent on Christmas gifts by parental status and age of Children, Christmas 2019 and 2020
    • Move to tier 4 impacted spending in London
      • Figure 78: Average spent on Christmas gifts in 2020, by age, January 2021
  18. Products Given as Gifts

    • Clothing overtakes BPC as most popular Christmas gift for 2020
    • Beauty sees a dip in gift purchasing
    • Food and drink remain central to Christmas celebrations
      • Figure 79: Products purchased as Christmas gifts, 2019 and 2020
    • Expertise in online plays into gifting trends
      • Figure 80: Products purchased as Christmas gifts, by individuals who sent gifts purchased online directly to recipients, January 2020
  19. When Gifts Were Purchased

    • Purchasing skews earlier due to COVID-19
      • Figure 81: When gift buying began, 2019 and 2020
    • Lockdown and uncertain Christmas restrictions also caused many to hold off
      • Figure 82: Christmas 2020, impact of lockdown on Christmas gifts, January 2021
    • November grows its share of Christmas spending once more
      • Figure 83: When the most was spent on Christmas gifts, 2019 and 2020
      • Figure 84: When the most was spent on Christmas gifts, by age, 2019 and 2020
    • Targeting earlier shoppers still crucial
      • Figure 85: When gift buying began, by average spent on gifts, January 2021
  20. Christmas 2020 Attitudes

    • Demand for less ‘throw-away’ gifts
      • Figure 86: Attitudes towards buying Christmas gifts in 2020, January 2021
    • Over a third looked to support smaller businesses
      • Figure 87: Christmas 2020, independent and charitable purchasing, by age, January 2021
  21. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • VAT
    • Abbreviations
    • Consumer research methodology

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