santanomics: the economics of the festive season · santanomics: the economics of the festive...
TRANSCRIPT
PwC
Contents
Slide 3 - Introduction
Slide 4 - Executive summary
Slide 5 - Christmas spending in 2013
Slide 8 - Trends in Christmas spending
Slide 14 - Appendices
2December 2014Santanomics: The economics of the festive season
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Introduction
• During the Christmas period, consumers in many countries increase their spending as theypurchase presents, decorations, food etc. for the festive period. This increase in spending makesthis a ‘make or break’ time for retailers and their supply chain. Therefore businesses need to beaware of how consumer spending will change over this period.
• To this end, we have attempted to calculate spending over the Christmas period by looking at theexcess spending that occurs in November and December over and above the average of the othermonths of the year.
• We have estimated spending over the Christmas period, both in per person and aggregate terms, inthe major Western economies, Brazil and Russia, and the peripheral Eurozone economies that wemonitor (see the appendices at the back for a more detailed description of our methodology and thesources of the data we used).
• It should be noted that our results give a broad indication of cross-country trends in Christmasspending but should not be taken as precise dollar estimates.
• The following slides set out our results and show how countries have moved in the rankings overtime, as well as how Christmas spending has recovered from the financial crisis.
3December 2014Santanomics: The economics of the festive season
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Executive summary
We have analysed real spending over theChristmas period across 12 countries. Our resultsshow that:
1. Ireland tops the rankings of Christmasspending per person, with shoppersspending around $1,200 during the holidayseason;
2. GDP weighted Christmas spending per personin the Eurozone periphery fell byaround 28% overall between 2007-13(see chart), as the crisis hit these economiesparticularly hard.
3. In terms of aggregate Christmasspending, Brazil and Russia make theTop 10 despite spending relatively little perperson (see chart); and
4. The US remains the largest Christmasmarket in the world, spending more than$240 billion during the holidays.
Real Christmas spending per person is lower inBrazil and Russia than in advanced economies
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
0
200
400
600
800
1000
Major Westerneconomies
Eurozoneperiphery
Brazil andRussia
GD
Pw
eig
hte
dC
hri
stm
as
sp
en
din
gp
er
pers
on
(co
nsta
nt
2013
US
$)
2007 2013
Notes: Major Western economies – G7 excluding Japan
Eurozone periphery – Greece, Portugal, Ireland & Spain
4December 2014Santanomics: The economics of the festive season
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Ireland ranks top of the per person Christmas spending league tablewith the UK ranking highest amongst the major Western economiesReal Christmas spending per person (constant 2013 US$)
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
Ireland
1,184
UK
1,065
US
776
Canada
682
France
574
Portugal
357
Italy
462
Germany
520
Greece
188
Spain
184
Brazil
166
Russia
93
Key
Ranks 1-3
Ranks 4-6
Ranks 7-9
Ranks 10-12
6December 2014Santanomics: The economics of the festive season
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The US is the largest Christmas market in the world with spending in2013 above that of the UK, Germany, France and Brazil combinedReal total Christmas spending (constant 2013 US$ bn)
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
Ireland
5
UK
68
US
245
Canada
24
France
38
Portugal
4
Italy
28
Germany
42
Greece
2
Spain
9
Brazil
33
Russia
13
Key
Ranks 1-3
Ranks 4-6
Ranks 7-9
Ranks 10-12
7December 2014Santanomics: The economics of the festive season
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How has Christmas spending changed over time?
On a per person basis:
• Ireland, the UK and the US were the top 3 Christmas spenders in our sample in 2003, 2007 and2013;
• Italy has been on a generally downward trend moving from 4th in the rankings in 2003 to 7th in2013; and
• Brazil and Russia ranked bottom of the Christmas spending league in 2003, 2007 and 2013.
In aggregate terms:
• The US is the clear leader in overall Christmas spending;
• By 2013 Christmas spending in Brazil had overtaken that in Italy while Russia had overtakenSpain and Greece; and
• Greece has moved from 9th in 2003 to last in 2013.
9December 2014Santanomics: The economics of the festive season
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2003Rank
Country 2007Rank
Country 2013Rank
Country
1 Ireland 1 Ireland 1 Ireland
2 UK 2 UK 2 UK
3 US 3 US 3 US
4 Italy 4 Canada 4 Canada
5 Canada 5 France 5 France
6 Germany 6 Italy 6 Germany
7 Greece 7 Greece 7 Italy
8 France 8 Germany 8 Portugal
9 Portugal 9 Portugal 9 Greece
10 Spain 10 Spain 10 Spain
11 Brazil 11 Brazil 11 Brazil
12 Russia 12 Russia 12 Russia
Irish consumers spend the most per person over the Christmas periodwhile Brazil and Russia sit bottom of the rankingsReal Christmas spending per person rankings
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
10December 2014Santanomics: The economics of the festive season
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Spending per person over the Christmas period increased most inIreland and the UK compared to the other months of the year in 2013Boost in spending during November and December compared to the rest of the year
0%
5%
10%
15%
20%
25%
30%
35%
Ireland UK Brazil Portugal Canada France Italy US Germany Russia Greece Spain
Sp
en
din
gb
oo
st
du
rin
gC
hri
stm
as
2013
co
mp
are
dto
the
rest
of
the
year*
(%)
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
2013 average – 16%
2007 average – 18%
11December 2014Santanomics: The economics of the festive season
*This shows by what percentage spending in November and December exceeds the average spending in 2 months of the year during the non-Christmas period i.e. January - October
PwC
Russia, Germany, the UK and Brazil spent more per person lastChristmas than in 2007Recovery of Christmas spending per person from the financial crisis
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Russia Germany UK Brazil Ireland France Canada US Italy Portugal Spain Greece
Ov
era
llp
erc
en
tch
an
ge
inp
er
pers
on
Ch
ristm
as
sp
en
din
g(2
007-1
3)
12December 2014Santanomics: The economics of the festive season
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2003Rank
Country 2007Rank
Country 2013Rank
Country
1 US 1 US 1 US
2 UK 2 UK 2 UK
3 Germany 3 France 3 Germany
4 Italy 4 Germany 4 France
5 France 5 Italy 5 Brazil
6 Brazil 6 Brazil 6 Italy
7 Canada 7 Canada 7 Canada
8 Spain 8 Spain 8 Russia
9 Greece 9 Russia 9 Spain
10 Russia 10 Greece 10 Ireland
11 Ireland 11 Ireland 11 Portugal
12 Portugal 12 Portugal 12 Greece
In aggregate terms, Christmas spending in Brazil has overtaken that inItaly while Russia has overtaken Spain and GreeceReal total Christmas spending rankings
Sources: PwC analysis, Datastream, national statistical agencies, World Bank
13December 2014Santanomics: The economics of the festive season
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Appendix A: Methodology
The following approach was used to obtain estimates of Christmas spending:
• We obtained real annual household consumption per capita and real annual householdconsumption data from the World Bank as well as real monthly retail sales data (non-seasonallyadjusted) from national statistical agencies.
• We then converted both the total and per capita household consumption data into a monthlyformat by assuming it follows the same trend i.e. monthly distribution, as retail sales.
• Using this new series, we defined and estimated Christmas spending as the excess expenditurearising in November and December compared to the other months of the year. However otherseasonal spending patterns may exist during a calendar year, and the distribution of Christmasspending could also vary, for example, a larger share of Christmas spending could occur beforeNovember. Therefore these numbers should be interpreted as giving a broad indication of cross-country differences in Christmas spending habits as opposed to precise dollar estimates.
• We limited our analysis to the G7 excluding Japan (which we have called the major Westerneconomies), Brazil and Russia, and the peripheral Eurozone economies which we monitor. Weexcluded China, Japan and India as Christmas is not a traditional holiday there, despite Christmasbecoming more of a commercial event in these countries, as any results and interpretations couldhave been less reliable.
• All of our numbers are in constant 2013 US dollar terms.
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Appendix B: Data sources
Variable Reason for including Source (s)
Retail sales (non-seasonallyadjusted)
The trend in monthly real retail sales wasused to convert annual householdexpenditure data into a monthly format
National statistical agencies,Thomson Reuters Datastream
Consumer prices index This was used, where necessary, todeflate a nominal retail sales time series
National statistical agencies,Thomson Reuters Datastream
Annual household finalconsumption expenditure percapita (constant 2005 US$)
This was converted into a monthly seriesassuming it follows the same trend asretail sales
World Bank World DevelopmentIndicators
Annual household finalconsumption expenditure(constant 2005 US$)
This was converted into a monthly seriesassuming it follows the same trend asretail sales
World Bank World DevelopmentIndicators
US GDP deflator Data was converted from constant 2005US$ into constant 2013 US$ using the USGDP deflator
US Bureau of Economic Analysis,Thomson Reuters Datastream
GDP (current US$) GDP weights were calculated usingnominal GDP to estimate the GDPweighted Christmas spending per person
World Bank World DevelopmentIndicators
16December 2014Santanomics: The economics of the festive season
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