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The cost of living crisis presents a challenge to brands’ Christmas campaigns.

Some have decided to forego their normal expensive Christmas campaigns – such as supermarket chain Coop, who aren’t running a TV ad campaign this year. Others will highlight the good they do in an increasingly squeezed community.

Here’s what we think the big impacts of the cost of living crisis will be on brands this Christmas.

1. Less consumer spending on gifts

This one seems quite obvious, but it’s worth stating. With the costs of gifts on the up and household budgets stretched by rising interest rates, we expect spending on gifts to be lower than it otherwise would be, as a lot of research is already showing. This doesn’t mean no gifts will be bought – but more families might consider Secret Santa arrangements so less overall presents are bought, or more labour-intensive gifts like homecrafts.

2. Experiences still key

However the rise of Christmas “experiences” should continue. People cooped up for lockdown Christmases are still keen to get out there and see beautiful displays and Christmas lights, as any scroll through TikTok will show. If you can craft the kind of in-store experience people want to film on their phones, you will probably get some good foot traffic. If you want to know what works and what doesn’t – our team of Shepherds will be able to check out your stores and your competitors rapidly.

3. Christmas dinner still key

With experiences so important it makes sense that Christmas Dinner retains a lot of importance for Brits. A survey of UK adults by Azerion found that while they expected to cut spending on gifts, spending on food would not be as impacted. 71% said they would spend roughly what they did the year prior – £100-£149. So food retailers can still expect to be extremely busy.

4. Retailers should expect returns

Those who do receive gifts might decide they need something else more. In other years an unwanted gift may have just sat unloved in a cupboard – but with so many families so stretched quite a few higher-priced items could find their way into return departments, or onto the second-hand market.

In such a turbulent time, good planning is key. Shepper can help you get a good handle of what your competitors are doing – and whether it is working.

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