In this article, I present the results of a survey conducted in France on Christmas 2024. It allows us to anticipate consumer behavior. I also explain why consumers are so cautious in 2024.
Christmas 2024 promises to be a cautious one. The economic and geopolitical context is undermining consumer morale. Despite this, hope and the festive spirit are not extinguished. A survey conducted in France provides a clearer picture. Intentions to celebrate Christmas are down 3 points (73% of French people vs. 76% in 2023). But above all, 49% of consumers are ready to cut spending, which augurs a difficult end to the year for retailers. To conclude this article, I explain why the phenomenon of over-saving could make Christmas 2024 the start of a long, dark chapter.
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Christmas 2024: key figures
- 73% of French people plan to celebrate Christmas (-3 points compared to 2023).
- 48% will celebrate New Year’s Eve (+2 points in 2023).
- 49% of French people believe that inflation will impact their holiday plans.
- 89% of consumers plan to buy gifts for Christmas, with more than half keeping their budgets stable.
- 70% of consumers will be more attentive to promotions this year (+1 point).
- -4.9% in volume in 2023: decline in FMCG purchases
- Sales of festive products in hypermarkets fell by -6%, while convenience stores recorded an increase of +4%.
Inflation: a cautious approach to Christmas 2024
Let’s start with an observation: inflation has fallen. But despite the improvement compared to 2023, we must admit that it still weighs on consumers’ minds. A survey reveals that the number of French people intending to celebrate Christmas is down. The figure is 73%, compared with 76% in 2023.
For New Year’s Eve, intentions are up slightly. 48% of respondents intend to celebrate the passage to 2025, compared with 46% the previous year.
However, 13% of respondents plan to celebrate neither (+1 point). It’s a wait-and-see period.
Here are a few results on the effect of inflation on holiday budgets:
- For 49% of those surveyed, rising prices will directly impact their holiday purchases.
- 70% of consumers plan to take greater advantage of discounts (+1 point compared to 2023).
Gift budget under pressure
Once again, the gift budget is likely to be tight this year. And the worsening economic situation is unlikely to improve.
According to the survey, 89% of French people plan to give gifts to their loved ones. This figure remains stable compared to 2023. But the budget will be under pressure. Children are somewhat spared since 50% of those questioned say they will not cut back on this budget (compared to 47% for adults).
Even age-old traditions such as Christmas are suffering, as they are the last adjustment variables for consumers.
Will physical stores survive?
When it comes to retailing, we must distinguish between several situations.
As far as food purchases are concerned (Christmas is the time when people eat well and a lot), deflation is the order of the day. The drop was -7.4% in 2022 volume, and in 2023 the fall continued (-4.9%). A closer look reveals that this contraction was particularly marked for high-end products such as champagne, foie gras, and smoked salmon. In hypermarkets, the drop in value was -6%.
But alongside this rather gloomy picture, another trend is emerging. That of a return to local shops. Sales by small retailers are up +4% in volume. How can we explain this trend? At this stage, we can only speculate:
- Consumers are looking for more differentiated products.
- The quality criterion leads consumers to choose brands not distributed in supermarkets.
- Convenience stores are less crowded than supermarkets.
The period of hyperinflation due to COVID-19 has changed the fundamentals of consumer behavior.
Christmas 2024: over-saving marks the start of a bleak period
Christmas 2023 was not particularly positive for fast-moving consumer goods.
Unfortunately, Christmas 2024 does not look any better.
Consumers remain torn. On the one hand, there’s the desire (and need) to escape and give in to tradition. On the other hand, economic reality invites itself to the festive table. In this respect, more than anything else, it’s uncertainty that undermines consumer morale and drives them to excesses of caution. As a result, consumer choices are more thoughtful, and budgets are tighter.
We’re witnessing a shift in even the most deeply rooted consumer habits. Even age-old traditions like Christmas are suffering, as they are the last adjustment variables for consumers. The last dikes are about to burst, and with them, our European consumption model (let me reassure you, the American model is doing just fine thanks to the money printing press). Why am I so pessimistic? Because the European consumer is in the doldrums.
Inflation is down. That’s true. Purchasing power has stopped eroding. However, the period of hyperinflation due to COVID-19 has changed the fundamentals of consumer behavior. The desire to save is stronger than ever. For example, France’s savings capacity should reach 18% by the end of 2024 (see INSEE’s Economic Outlook). This is a record for over 40 years.
Paradoxically, this over-saving is the preserve of the very wealthy. The richest 20% of households is estimated to accumulate 50% of over-savings. These households were driving consumption of the most high-end products during the festive season, and it is, therefore, causing them to falter.
The trauma of hyperinflation has had a lasting effect on behavior. For this reason, we’re entering a complicated period that will last several years. We’ll only come out of it if inflation remains stable for several years, if the war in Ukraine ends, and if energy prices enable us to revive the European industrial machine. That’s a lot of “ifs,” to be sure.
Posted in Research.