Twelve Economic Impacts of Christmas

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Twelve Economic Impacts of Christmas by Professor John Bryson.

There are many types of Christmas. For some it is a special religious moment, for others it is a time for families and for many a time for consumption. Christmas, however, for many firms is a major commercial opportunity and a challenge. The spike in their trading activities comes with associated costs including temporary Christmas workers. For others, Christmas produces another challenge – a 30% increase in waste. These twelve economic impacts reflect only some of the impacts Christmas has on the UK economy.

  1. Christmas Toys and Seasonal Production

The toy industry is seasonal with the majority of sales associated with Christmas and to a lesser extent spring. Two-thirds of toy companies’ annual sales occur in the autumn. This has important consequences for the timing of toy companies’ product development cycles and the co-ordination of supply chains. In any one year, on average, about 80 per cent of a company’s products will be new. A new product takes about 12 to 18 months to develop. This means that costs accrued over this period are offset against existing profits.

  1. Christmas Shopping

In 2015, UK retailers took £24bn (21% of annual retail consumption) over the Christmas period compared to £114bn over the whole year. Friday 23 December has been labelled ‘Frenzied Friday’ as it is estimated that 10 million people will spend £894m. Friday 23 is expected to be a commercial battle as retailers fight to obtain a share of one of this year’s peak shopping days. On Friday most people will receive their salaries and will head to the shops. The average British family is expected to spend £800 on Christmas shopping – food, drink and gifts).

  1. Christmas and the Temporary Job

Christmas shopping places pressures on retailers who need to recruit seasonal workers.  John Lewis began hiring in August 2016 as they tried to fill 3,500 seasonal positions. In Manchester, Amazon recruited an additional 1,500 Christmas employees and Marks and Spencer recruited 14,000 seasonal employees across the UK.

  1. Christmas Day

Christmas day is one of the least important days for business as almost all retail, commercial and public sector organizations are closed. In England and Wales, the Christmas Day (Trading) Act 2004 prevents all large shops from trading on Christmas Day. But, increasingly Christmas dinner is followed by browsing the on-line sales.

  1. Christmas and the Environment

Christmas has a major negative impact on the environment that includes the manufacture of Christmas decorations and the giving of what are often unwanted gifts. These gifts create employment through their production, but also incur storage costs on behalf of recipients and contribute to waste, including carbon emissions, but also recycling. In 2014, £2.4 billion was wasted on uneaten, discarded food and unwanted gifts. 30 per cent more rubbish is produced over the Christmas period and the carbon footprint of Christmas-time equates to 5.5 per cent of the UK’s annual carbon dioxide emissions. But, the waste and recycling industries generate additional employment and business opportunities.

  1. Christmas Wrapping Paper

Christmas wrapping paper is a big industry. The amount of wrapping paper estimated to be thrown away in the UK at Christmas could stretch around the equator nine times or to the moon if each sheet was laid end-to-end.

  1. Welsh Christmas Tinsel

Tinsel manufacturing began in Wales over 25 years ago after Festive purchased two tinsel machines from Germany. Festive now produces over £3 million worth of Tinsel each Christmas.

  1. First, Christmas Day and then Divorce Day

First, comes Christmas, then New Year and the first Monday after the Christmas break is Divorce Day, when e-mails about divorce fill lawyer’s in-boxes. A divorce, like a wedding, contributes to gross domestic product.

  1. Drink Drive Collisions

On average, 3,000 people are killed or seriously injured each year in drink drive collisions. Nearly one in six of all deaths on the road involve drivers who are over the legal alcohol limit. Drinking and driving occurs across a wide range of age groups but particularly among young men aged 17-29 in both casualties and positive tests following a collision. Like divorce, drink drive collisions contribute to gross domestic product by providing employment.

  1. Gift giving

According to a survey undertaken by PwC the average UK adult expects to spend around £280 on Christmas gifts this year, but 4% expect to spend nothing on gifts. These gifts create local employment in the UK including jobs in e-commerce and delivery services and also employment overseas. Gift giving also generates additional waste from wrappings and packaging.

  1. Birmingham’s German Christmas Market

Birmingham City Council has estimated that the market brings financial benefits of £85 million to the city. There are two related impacts. First, the direct cost of sales and, second, the stallholders rent homes and live in the city for two months.

  1. Overall impact of Christmas on the UK economy

Every fourth quarter, there is a spike in household consumption, followed by a reduction in the following quarter as households cut back their expenditure. In 1997, household expenditure during the Christmas season was £170bn and this had risen to £240bn by 2012.

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