Give and get in Luxembourg
For 14 years now, Deloitte has published a market analysis on buying patterns in Europe at the end of each year. Over 18,000 prospective buyers in eighteen European countries gave their opinion in the survey again this year about what they intend to buy and to what extent the European economy influences their decisions to purchase goods and services. The crisis has finally arrived to consumers’ wallets: a significant change from last year, the people surveyed in Luxembourg will spend 23% less money on gifts, eating and leisure during Christmas than the year before. Georges Kioes, Partner Commerce & Industry Leader at Deloitte Luxembourg, is responsible for the analysis of the data, 500 Luxembourgers contributed to the study. LFF met him for a pre-Christmas interview.
Why is Deloitte interested in tracking consumers’ buying patterns?
Consumers in Europe are a good indicator for market health. Therefore, it is important for us to know how the market is doing and how it reacts. The study was launched fourteen years ago, and each year new countries are added. So this is an increasingly representative study.
To what extent can the retail industry benefit from the study?
By analysing the study, the retail industry can learn more about their competition, as well as opportunities to stand out from the others by improving the quality of their products and services. It is clear from the study’s results that – not only in Luxembourg, but also in Europe as a whole - the huge supermarkets are preferred and that the Internet is playing an increasingly crucial role. However, in Luxembourg people prefer small retail shops, more than in any other European country.
What are the main reasons the end of year budget for individuals is 300 Euros less than last year (923Euros in 2011/1,200 Euros in 2010)?
This year, the people surveyed are much more anxious than in previous years. The figures speak for themselves: last year, 30% of those surveyed believed that we were in a recession; this year a staggering 59% believe that this is the case. This is clearly the reason why people spend less, because they are afraid of the financial future. Last year, 22% were pessimistic, saying the recession would continue, but this year the figure has increased to 52%.
Why did the budget in Luxembourg for end of the year expenses show a higher decline by percentage than budgets in troubled countries like Portugal, Ireland or Italy?
You cannot go below a certain minimum level. The budget in Luxembourg was so high compared to other countries, that it is easier to spend 200 or 300 Euros less than in countries where average budget amounts to only 300 or 400 Euros altogether.
Does the Luxembourg retail industry use the Internet effectively?
At this point there is still a backlog demand. Also, consumers in Luxembourg use the Internet to compare prices and get information rather than to buy. This could be explained by the underdeveloped transportation solutions. Many American or German retailers do not deliver to Luxembourg.
To what extent can last minute-buyers influence the market?
Luxembourgers buy more spontaneously than other Europeans, so it is difficult to say how this behaviour will influence the market. At this point, the retail market can make a difference. If the shops are impressive and attractive, people will spend more spontaneously. Someone who can spend 900 Euros has a higher margin to shop spontaneously than someone who is able to spend less.
According to your study, 57% of Germans surveyed believe that their economy is stable. To what extent is this due to Angela Merkels’ role in the negotiations about the future of the Eurozone?
I believe that the economic situation in Germany appears to be in better shape than in other European countries. Germany is the biggest economic force in Europe. Figures provide evidence of a comparatively better situation. But if this were to change, the effect would be dramatic.
What are the most popular gifts?
Same as in the past, they continue to be books and money. But a highlight from this year is the increase in people who wish for wellness and spa treatments. Moreover, the connection between what people want and what they end up getting has improved. So gift recipients really get what they want.