In the News Teaching Activity – Is Christmas 2023 likely to be a merry one for retailers? A gloomy tale of consumer spending (Dec 2023)

The Economics Observatory have taken a closer look as the factors that have influenced consumer spending in recent years and considers how retailers are likely to be affected.

Despite the fall in headline inflation, predictions for consumer spending during Christmas 2023 remain pretty gloomy. Families are fretting over bills and interest rate pressures, while retailers face supply chain concerns. Christmas now stirs up ethical debates in a world grappling with income inequality and environmental sustainability crises. The 'golden quarter' for retailers, October to December, holds make-or-break potential for their profitability. Recent years, with the pandemic, energy shock and geopolitical crises, have cast a shadow on hopes for a prosperous Christmas. Surveys predict cautious consumer spending according to the Economics Observatory. We will have to wait until the new year to find out if this pessimistic outlook for consumption turns out to be the case!

How is consumer spending around Christmas 2023 likely to affect retailers? - Economics Observatory

1 What is ‘consumption’?

2 According to the article from the Economics Observatory, what factors have influenced consumer spending in recent years? Extension: Practise writing an analytical sentence that links each factor to consumption.

3 Discuss the importance of a strong performance during the Christmas period for the profitability of retailers. Why might some retailers fare better than others?