North-easterners spend, spend, spend

Dec 4 2007 by Karen McLauchlan, Evening Gazette

CHRISTMAS looks set to be a busy one if consumer spending forecasts are to be believed. But instead of joining the traditional High Street crush, we'll be doing more of our shopping over the internet.

We’ll also be turning to farmers’ markets and local suppliers for our groceries, says the Annual Christmas Survey from Deloitte.

Big-hearted consumers in the North-east are expected to spend a whopping £446 on gifts this year - £59 more than the average Brit and roughly £6 up on last year. We'll guzzle our way through £197 of food and drink and blow £146 socialising - £46 more each than in 2006, making us the second highest spenders in the UK.

The figures fly in the face of a predicted consumer spending clampdown.

“Early indications suggest concerns about bruised financial markets and consumer confidence are nothing more than concerns,” said Paul Feechan, lead partner for Consumer Business at Deloitte in the region.

“People feel secure in their jobs and general sentiment is robust.

“The impact of the credit squeeze could play out in the coming weeks when events have had time to percolate through consumer mindsets, but we think it's unlikely.

“Movements in interest rates or price hikes on petrol are much more likely to trigger a reluctance to spend, as these have a direct impact on the health of bank balances at the end of the month.”

Joanne Fryett, head of member relations at the North East Chamber of Commerce, said shoppers had been buoyed by the thriving economy in the Tees Valley.

“I think businesses and consumers are just getting on with things,” said Ms Fryett.

Shoppers were also becoming more discerning.

“We have a strong retail economy in the Tees Valley which is down to consumers saying they want more, and not necessarily low-cost, shops.

“There is demand for stores across the board but we now have stores like Monsoon and Accessorize in Middlesbrough. We can hold our own against the likes of Newcastle and Gateshead.”

But when Santa calls, he's more likely to be pulling something techie from his sack with Wii and iPod predicted to be among the biggest sellers. Forty-four per cent of consumers will buy a computer game, up 6% on last year.

Nationwide video games chain CHIPS, with its head office in Middlesbrough, is seeing a Christmas spike across its 32 stores.

Don McCabe, joint managing director, said Nintendo, Wii and DS Lites were “flying out the door”.

“Indications are that spend will be up on last year. Stores are busy, especially as we offer trade-in - something that you can’t do online or at supermarkets.

“Customers can trade in their old games against new purchases and clear space in the cupboards for the latest must-have.”

The Confederation of British Industry, which takes the pre-Christmas temperature of retailers each year, said seasonal sales nationally were slow off the blocks. But the consolation for business was that average selling prices were up. Forty-six per cent of retailers reported higher prices than last year, while only 4% said they were lower, despite keen price competition.

Luxury and indulgence sectors were faring well, it said, especially in food, where specialist groceries saw the strongest price balances, up 69%.