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22 Nov 2009

Christmas - Go Figure - The Economics of Christmas

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By Stuart Brown   
Page 3 of 4

The interesting part for me on looking at these figures is how, although all of us are naturally plugged in to 'visible consumption' mode because Christmas is fast approaching. That in general we actually spend very little on having a good time. Most of our cash goes on putting a roof over our heads, getting to work, eating and paying the bills. Whether we actually spend 5% or 15% on recreation it is still low in comparison to just getting by. And the amounts left over to actually enjoy ourselves (what a concept) are minimal in comparison to surviving.

It is with this in mind then that spending on items that might be regarded as mildly fripperous like books or toys comes into sharp focus; and certain industries really do survive on the basis that we spend extra 'feel good' money in a splurge at the backend of the year. It is these extra margins that can often make the difference between making a profit or not. Consider for example the following areas and the percentages that were sold in different periods of the year in 2002 in the UK: (I have highlighted the period in each case when most products were sold)

Quarter 1
Jan - March
Quarter 2
Apr - June
Quarter 3
July - Sept
Quarter 4
Oct - Dec
Games, Toys and Hobbies 21.1% 23.9% 23.8% 31.2%
Sports Equipment (inc camping etc) 21.8% 24.2% 23.2% 30.8%
Gardening products & plants 22.5% 39.8% 19.6% 18.1%
Books 19.8% 20.6% 22.6% 37%
Pets and pet Related Products 24.6% 25% 25.4% 25%
Games of Chance 24% 25.2% 25.1% 25.7%
Stationary & Drawing Materials 22.6% 22.7% 23.5% 31.2%
Audio Visual Equipment 23.7% 20.6% 21.7% 34.1%
Photographic Equipment 24.4% 23.2% 24.2% 28.2%
Shoes & Other Footwear 20.7% 24.4% 25.8% 29.1%
Clothes 20.6% 23.3% 23.6% 32.5%
Alcohol 22.8% 24.6% 24.7% 27.9%
Figures Based on UK Consumer Trends Report (The 'CN' variety because these are not seasonally adjusted)

Now, of course, these are but a mere smattering of areas where you could potentially spend your hard earned cash. And I am sure that ice cream salesman don't do wonderfully at Christmas. But nevertheless it does serve to emphasise what an important time Christmas is from a financial as well as spiritual and family perspective.

 
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