Inflation Grinch steals Christmas: Less will be spent on presents this year

Inflation may well be the new Grinch which is stealing the magic of Christmas, a MaltaToday survey suggests. 

When respondents were asked to compare their present personal budget for Christmas gifts with last year’s, four in 10 replied they will be spending less. 

Moreover, 9% will be spending the same as last year but will only be able to do so by cutting on other expenses. This means that inflation is taking a negative toll on one of the highlights of Christmas for nearly half the population. 

On the other hand, in an indication that only a minority have gotten richer in the past year, only 8% plan to spend more than last year on presents while 37.5% replied that they will be spending the same as last year without having to resort to cost cutting on other things. 

The survey also shows that those earning under €1,000 per month are the most negatively impacted. Among this category half would be spending less on gifts than last year while 12% will spend the same by cutting on other expenses. 

Respondents earning between €1,000 and €2,000 per month are also hard hit by inflation. In this category, 40% will spend less than last year while 7% will make cuts on other expenses to spend the same amount on gifts. 

But the percentage of those who will spend less on Christmas presents falls to 27% among those earning between €2,001 and €3,000 a month and to just 24% among those earning between €3,001 and €4,000 a month. 

Curiously, the percentage of those who will spend less rises to 27% among those earning more than €4,000 a month. 

Moreover, even among high income earners only 12% will be spending more than less year.   

The survey also shows that middle aged respondents were more likely to say that they will be spending less on gifts than last year. The hardest pressed where those aged between 51 and 65 amongst which 47% will spend less on gifts this year. 

These were closely followed by respondents aged between 36 and 50 who are in the middle of the career and more likely to have dependent children. In this income bracket 45% replied that they will be spending less on gifts this Christmas.  

In contrast only 34% of 16- to 35-year-olds and 38% of over 65-year-olds  will be spending less on gifts this year. 

The survey suggests that under 35-year-olds-some of which may be at the start of their careers- are the least hard pressed by inflation and the most likely to have seen a boost in their income in the past year. 

In fact, 13% of 16- to 35-year-olds replied that they have more money to spend on gifts than last year. These are followed by over 65-year-olds, among who 9% said they have more money to spend than last year. This could partly reflect the budget’s focus on sustaining pensions. 

On a regional level, the most likely to state that they will be spending less money than last year were the inhabitants of the North Harbour region, which includes major towns like Qormi, Birkirkara and Sliema (49%) and Gozitans (47%).   

In a reflection of the gender pay gap, while 45% of females replied that they will be spending less on presents this year, the percentage falls to 36% among males.

Scrounging for a value meal 

While 41% will be spending less on gifts, only 9% replied that they will be reducing their budget for Christmas lunch. This may well be an indication that this event is so important, that most will go out of their way to celebrate an event which brings families together. 

But this comes with a caveat because with food prices soaring, the value of the Christmas meal is greater than that of last year’s. In fact, only 2.4% of respondents replied that they will be spending more on their Christmas lunch because they have more money to spend. 

In contrast 38% replied that they will be spending more because they have no other choice since prices have increased. Moreover, 36% replied that they will still try to stick to last year’s budget by seeking bargains while shopping.   

And in another indication that the lower middle class and the working class are the most hard hit by inflation, a tenth of those earning between €1,001 and €2,000 a month will be spending less. 

But the most likely to be seek the best deals to keep within their usual budget are those earning between € 2,001 and €3,000, 38% of which will be trying to do so. 

Significantly, in an indication that a large segment cannot even plan ahead, 22% of those earning under €1,000 a month, were unsure on how much they plan to spend on their Christmas lunch. In contrast only 4% of those earning between €3,000 and €4,000 a month were unsure. But the percentage of Don’t Knows rises to 18% among those earning over €4,001 a month. But this could well be an indication of a carefree attitude rather than an inability to plan. 

Respondents aged between 36 and 50 and those aged between 51 and 65 were the most likely to say that they will be spending less than last year (13%).  These two age groups which includes families with dependent children, were also the most likely to say that they will be doing their best to keep within last year’s budget. 

A breakdown by regions shows that it is respondents living in Gozo  who will be spending less on their Christmas lunch (16%).  These are followed by respondents in the North Harbour(12%).