Consumers should spend more this holiday season, but not as much as in 2014

Consumers have shown a greater tendency to spend, albeit still not as much as three years ago. This data comes from Sondagem do Consumidor [Consumer Survey], carried out by FGV’s Brazilian Institute of Economics (IBRE) for this Christmas season. On average, 46.8% out of 1,869 respondents stated they are willing to spend the same as in 2016. This percentage is nearly the same as those who intend to spend less (46.5%). Only 6.7% stated that they would spend more this year compared to 2016.

The Christmas Shopping Intent Indicator, estimated based on favorable and unfavorable responses, rose from 47.7 points in 2016 to 60.3 points this year. “The result shows a greater consumer spending momentum compared to the last two years across all income ranges, but still less than in 2014,” said Viviane Seda, Coordinator in charge of IBRE’s Sondagem do Consumidor.

According to the survey, consumers’ willingness to spend varies according to the income range. The most pessimistic are those who earn up to BRL 2,100.00: A total of 63.1% stated they would spend less, compared to 3.5% who were willing to spend more this holiday season. On the other hand, among respondents with income above BRL 9,600.00, 59.7% should maintain the same level of spending and 8.8% intend to shell out more.

Consumers expected to pay up to BRL 50 on presents

A total of 41.2% of respondents stated they will pay up to BRL 50.00 for presents. The highlight is the group that will spend between BRL 201.00 and BRL 500.00. This percentage of consumers has risen from 5.3% to 7.2%, out of 25.8% who intend to spend more than BRL 100.00.

“The average present price for consumers with incomes of up to BRL 2,100.00 is BRL 59.00, while this amount rises to BRL 151.00 among consumers with higher purchasing power (over BRL 9,600.00). The difference between consumers from the opposing income ranges is BRL 91.60, which is very similar to last year (BRL 92.60). This can be explained by the greater difficulty of consumers with lower purchasing power to compromise a portion of their budget, considering their indebtedness,” said Seda.

Clothes are the favorite presents

As in previous years, clothes are the go-to choice for Christmas presents. In 2017, the survey showed that 41.7% of people preferred this item, followed by toys (22.9%), souvenirs (12.3%), personal items (4.8%), books (3.7%), and footwear (3.7%). According the economist, “the vast majority of consumers still prefer to give clothes due to the broader price range.”