Most people’s first thoughts when it comes to the Christmas season are of the presents, food, music, and time spent with family. However, lost amongst the many upsides of the holiday period is the huge economic boost that Christmas brings.
The lead into Christmas is a period of huge economic importance. It is often the time when the retail sectors are at their busiest and consumer spending reaches its peak. Last Christmas, shoppers spent significantly more in the four weeks leading up to Christmas than they did the previous year.
This increased spending was largely due to the huge rise in consumer savings as a result of the pandemic and a hunger for a “normal Christmas” after a turbulent year of dealing with lockdowns and Covid 19 restrictions. During the pandemic, consumer savings hit record highs of over €31 billion, higher than levels during the Celtic Tiger. While total savings reached €135 billion.
Consumer spending is not expected to hit the levels of last year, however, retailers are hopeful of the usual Christmas boost in revenues. Figures for October show that consumers began Christmas shopping earlier this year, largely due to concerns around supply chains and the availability of products. This was reflected in October spending on toys and gaming rising by 58pc, according to Bank of Ireland’s card data.
The biggest single day for retailers in the lead up to Christmas is Black Friday. Irish consumers were expected to spend over €25,000 a minute during Black Friday.
In the lead up to Christmas, there has been increased emphasis on the need to shop local and buy Irish. Campaigns by the Irish Small Medium Enterprise Association, as well as the government, have urged consumers to shop local. Every €10 spent locally on Irish products generates more than €40 of benefit to the local community in terms of employment. According to Tánaiste and Minister for Enterprise, Trade and Employment, “It’s more important than ever to look for local and support the small businesses in your community”, especially as the economy looks to rebound from the impact of the pandemic.
The economic importance of Christmas cannot be understated. Consumers spend approximately €1.2 billion on Christmas shopping. In total, approximately €4.8bn will be spent on retail sales during December. All of which is of vital importance to a retail sector that was severely impacted by the pandemic.
As we come to the end of another difficult year, which saw many businesses closed for prolonged periods, the Christmas season will come as a much-needed boost to the sector. As the saying goes, currently it seems the only certainty is uncertainty, and with case numbers rising once more and talk of new Covid variants, we might not have seen the last of public health restrictions. A fact that the retail sector will be all too aware of. However, the Christmas period is a time of hope and businesses will be hoping that Christmas and the economic boost it brings with it will mark a more positive end to what has been a difficult year for the sector and the country as a whole.
Mark O’Rourke – Business Correspondent