According to the Mastercard Economics Institute, total holiday spending across Europe is set to increase this year. The fashion, electronics, and cosmetics sectors are expected to see further growth. Travel is also gaining importance during this period, especially to warm destinations. Despite increased purchasing power, consumers are still cautious and their purchasing preferences indicate a desire to look for savings and reach for premium products at attractive prices.
The Mastercard Economics Institute forecasts that European spending during the holiday season in 2024 will increase by 2.9% compared to the previous year. This growth includes both retail sales in brick-and-mortar stores and online, covering all forms of payment. Poland is especially projected to see a substantial increase, with a result of 6.4%, which ranks it second among European nations. It is only surpassed by Hungary (7.7%). During Black Friday 2023 in Europe, there was an increase in spending on luxury clothing; consumers shifted their purchases from the mass market to premium brands, taking advantage of reduced prices. A high price sensitivity in 2024 may lead to similar behaviors during the holiday season.
Consumers in Poland and other European countries are cautious, although the overall economic climate increasingly encourages spending. The unemployment rate in Europe remains historically low and inflation is trending downward. In Poland, year-on-year wage growth (10.3%) exceeded inflation growth (4.2%), which resulted in an increase in purchasing power. The confidence of Polish consumers in the third quarter of 2024 reached -0.2%, compared to -18.5% in the same period in 2022.
“European consumers go into the 2024 holiday season with more optimism than the previous year, although they still exercise caution in terms of spending. The most popular categories in terms of anticipated sales growth will be gift categories such as fashion, cosmetics, and electronics. We are observing a great interest in Black Friday deals, which allow consumers to maximize the value of their purchases”, says Natalia Lechmanova, Chief Economist at Masterboard Economics Institute.
What will be the main trends in the near future?
– Increase in holiday season spending. It is expected that from November to December, holiday spending in Europe will increase by 2.9% year on year, according to Mastercard SpendingPulse analysis of retail sales in stores and online for all payment methods.
– Continued growth in spending on electronics and household appliances, which has started growing again after periods of decline in this category following the end of the pandemic. During the holiday season, popular gift categories like cosmetics, fashion, and electronics have a significant potential for growth. Spending on clothing will grow the most among the Hungarians (+5.9% YoY), Spaniards (+4.5% YoY), and Czechs (+4.5% YoY), while spending on electronics will grow among the British (+5.5% YoY), Germans (+4.5% YoY), and Czechs (+3.2% YoY).
– Price sensitivity and changes in shopping preferences. In Poland and Europe, consumers are increasingly opting for products from a higher shelf due to the stronger economic growth. This trend, associated with increasing price sensitivity, is particularly visible in the online sales segment.
– Increase in consumer trust. The improvement in moods regarding personal finances has led to an increase in consumer trust, especially in countries in Southern, Central, and Eastern Europe.
– Travel during the Christmas and New Year’s period is gaining popularity, especially among those wishing to combine visiting their relatives with relaxation. Shop-cation, or shopping tourism, is also being observed more frequently, particularly in the area of fashion. Sunny destinations are also gaining considerable interest during this period.
Poland remains among the popular tourist destinations this year, with sunny locations in Morocco, Portugal, and Spain being the most popular winter holiday spots among Europeans. More budget-friendly winter trips to countries like Hungary and Poland are also an option. The most frequent visitors to Poland are Dutch, Swedish, Italian, and Spanish tourists. Krakow is one of the leading tourist destinations among European tourists. Conversely, Polish people prefer to go to Malaga and Barcelona in Spain, as well as Cyprus.
The forecasts were prepared by the Mastercard Economics Institute based on a comprehensive set of spending data, including Mastercard SpendingPulse, which measures retail sales in physical stores and online in all forms of payment, including cash and checks. These forecasts do not account for inflation. The SpendingPulse analysis covers nine European markets, including the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Spain, and the United Kingdom.
Source: https://managerplus.pl/wydatki-swiateczne-2024-wiecej-zakupow-wieksza-ostroznosc-konsumentow-84890
