Celebrating Christmas’ annual economic boost
As I walked through the streets of Cardiff earlier this week with the sounds of Wham!’s Last Christmas or Slade’s Merry Xmas Everyone blasting from the doors of shops, pubs and restaurants, it was a timely reminder – with so many people shopping, eating and drinking – of the importance of the holiday season to the Welsh and UK economies.
Estimates suggest that Christmas is worth around £78bn of spending to the UK economy, with the average family estimated to be spending around £800 this year, despite a squeeze on wages and higher inflation. In fact, December is the busiest month for shopping, accounting for 12% of all annual retail spend.
Much of this is on food and drink – with supermarket sales being 43% higher during Christmas week than in a normal week – and presents to friends and loved ones. Each child in the UK will, on average, receive around 16 presents at Christmas, with six million rolls of Sellotape sold to wrap them up.
In addition, the amount of wrapping paper estimated to be thrown away in the UK on Christmas Day could stretch to the moon if each sheet was laid end to end.
Not surprisingly, digital devices are becoming more popular as Christmas presents, and it is estimated that 6.8 million devices such as phones and tablets will be activated on Christmas Day. In 2016, it was estimated that for every £10 spent online in the UK over Christmas, £4.10 was spent over a mobile device.
Clearly, the spend on food directly supports the UK’s agriculture sector, with 10 million turkeys consumed, along with 25 million Christmas puddings.
In addition, more than 8,500 tonnes of carrots are sold in the week running up to Christmas, with 3,000 hectares of land utilised to grow the Brussels sprouts that go on to the Christmas dinner plate. This is then all washed down with 250 million pints of beer and 35 million bottles of wine.
And it is not only on the dinner table where farmers are benefiting. More than eight million Christmas trees are sold every year in the UK, with some having been grown for 20 years or more before they are chopped down to decorate living rooms across the country.
As we know, people’s shopping habits in the run-up to Christmas have changed in recent years, especially as the so-called Black Friday/ Cyber Monday phenomenon has encouraged consumers to look for bargains earlier. These two promotional events had helped a 1.1% increase in the number of goods bought in November as compared to the previous month, at a time when economists had forecast growth of 0.4%.
Despite this, some analysts are expecting spending within shops to drop due to the state of the economy, but this will be partly compensated for by online sales, which are forecast to rise by nearly 4%. And for every £5 spent during November and December, almost £2 will be spent online – a record share of this year’s Christmas spending.
And with Christmas Eve falling on a Sunday, many of the large supermarkets and stores will be shutting their doors at 4pm and not opening again until Boxing Day. As a result, it is estimated that many small convenience stores across the country will benefit to the tune of £105m as an estimated 1.5 million shoppers will be looking for last-minute goods and gifts.
Indeed, let us not forget that the economic benefits of Christmas should not be exclusively for the big department stores, supermarkets and Amazon, and that with only a few days left for shopping, you should think about buying gifts for your loved ones and friends from your local shops, thus giving the Welsh high street the boost it needs at this time of year. Remember, for every £1 spent with a small firm, 63p stays in the local economy as compared to 40p with a larger business.
So Christmas is providing a timely boost to many parts of the UK economy.
However, despite the economic impact of spending during these holidays, none of us should forget that this is a time that brings families together and makes all of us appreciate what we have and what is important in our lives. That is the real significance of Christmas every year.
Nadolig Llawen!