Consumers are expected to be out in force on the high streets during the festive season despite worries about jobs and the scale of increasing costs next year.
Surveys show shoppers are in the mood for splashing out on Christmas presents, while the pulse of retailers also looks healthier than a year ago. However, 2010 could be the year of frugality as the cost of living rises.
Domestic consumption in Switzerland has held up relatively well so far during the economic downturn. One survey from Deloitte shows that Swiss shoppers are more optimistic than European counterparts, and are willing to spend an average of SFr628 ($616) on gifts this year.
This equates to roughly the same amount as was spent last year, despite worsening economic conditions.
A separate survey by St Gallen University indicates that while people are concerned about their budgets for next year, Christmas shopping in 2009 will not be affected by the economic climate.
Shops were boosted by the arrival of the first snow last week, that promises not only to lift lagging sales of clothing, but also to put shoppers in the festive mood.
High end retail chain Globus aims to tap into the Christmas market by promoting a British theme that features both a traditional Dickensian feel and a range of younger, more vibrant products that reflect the “Cool Britannia” craze of the late 1990s.
“The weather has become more wintery and that will put people more in the mood for Christmas,” Globus spokesman Jürg Welti told swissinfo.ch. “People want to buy gifts even in bad economic times.”
“We had a good year in 2008 and we are optimistic about the Christmas season this year,” he added.
But with the arrival of more shopping centres and increasing use of the internet to buy gifts, rivals are being forced to compete harder than ever for market share with special offers. Shop windows are already festooned with enticing cost cutting deals.
Much of this has to do with continuing economic uncertainties, but may also reflect a rise in internet shopping that can offer better prices. This is particularly relevant to electronic goods, which can be purchased online at up to 30 per cent cheaper than in shops, according to Ralph Weber at price comparison website Comparis.
“Increasing numbers of people are buying flat screen TVs, digital cameras, movies and GPS systems online in Switzerland,” he told swissinfo.ch. “This is a trend we will see increasing over the next few years.”
At the moment, however, the high street shop still holds the upper hand, with 67 per cent of shoppers preferring to visit a store to buy their gifts, according to the Deloitte survey. The St Gallen Universtity study also paints a similar picture, with some 70 per cent choosing the high street for at least part of their shopping, compared with 56 per cent going to an out of town centre and 19 per cent surfing for bargains online.
The latest government data show that retailers enjoyed year on year growth of profits in October, up 1.4 per cent (stripping out raw material costs) on 2008.
Many consumer sentiment surveys also show people defying the slowdown of wages and rising unemployment in Switzerland by spending their cash in shops. However, 2010 could buck the trend as rising costs adds to the erosion of disposable income.
The St Gallen University survey of 2,000 consumers showed that 38 per cent plan to reduce spending next year, with only 16 per cent confident enough to open their wallets wider. If every consumer saves SFr15 per week next year, retailers could lose SFr1.1 billion for the year, the survey predicts.
“There is a lot of uncertainty about the economy and jobs,” survey author and retail expert Thomas Rudolph told swissinfo.ch. “But what is certain is that healthcare costs, pension payments and probably petrol prices will rise next year.”
For now it appears that Swiss retailers could enjoy a successful Christmas season, but they may also face a post-festive hangover.
Matthew Allen, swissinfo.ch
Deloitte Switzerland shows that Swiss are on average willing to spend SFr628 on gifts this Christmas.
Shoppers in the French-speaking region appear to be the most generous, budgeting SFr828 while German-speakers are setting aside SFr571. Women are also more generous than men when it comes to buying presents.
An additional per household SFr114 is being set aside for food and SFr60 for games and activities over the festive period.
The Swiss are also well organised compared with European counterparts. Exactly half of those surveyed said they would buy presents in advance of the main shopping weeks, compared with 40% in Spain, 22% in France and 16% in Italy. Only Germans are more prepared, with 61% beating the crowds with early buys.
The St Gallen University survey reveals that clothes and shoes are the most desired presents to receive (25.5%), followed by books (24.6%) and tickets for cultural events (24.5%).
Men are more interested in electronic goods and games and sports gear while women show an increased preference for jewellery and perfumes.