The Festive Holiday Illusion

The Festive Holiday Illusion

The yearend showed a promising rise consumer confidence. Are we really spending more on food, clothing and hotels or is it just an illusion brought on by the holidays?

April 3, 2011 3:59 by p.deleon

Whoever said holidays are just a big marketing ploy may have been saying because they were cheated out of the gift during the holidays and was just being a grinch. But they’re not far off from the truth, as MasterCard Worldwide’s latest survey shows.

Cardholders in the UAE were apparently more generous with their spending dollar during the fourth quarter of 2010, purchasing food, shopping and spending on hotel stays

Derived from MasterCard’s processing data, spikes in spend were recorded mainly in November 2010—six of the top ten days when highest spend was recorded are from this month. A quick dusting of Kipp’s 2010 diary reveals it was Eid Al Adha during November 16-18.

The remaining four days are split between the months of October and December. Of the top 10 spend days, consumer spend was seen mainly on Thursdays and Saturdays.

“The top 10 spend days data clearly shows that consumer spending in the UAE grew towards the end of the year, possibly in line with the festive season,” said Eyad Al-Kourdi, vice president and country manager, UAE, MasterCard Worldwide.

“When looking at the top spend categories, while consumer spending was mainly related to non-discretionary expenses, consumers in the UAE did also enjoy discretionary spending, such as dining out or traveling.”

Of the top 10 spend days for 2010, 23 October and 6 November recorded the highest spend by MasterCard local and foreign cardholders. Cardholders spent 42 percent above the daily average amount on both these days.

Consumers stocked up on food and shopped at other retail outlets, clothing stores, department stores and bought new electrical appliances on these days.

Interestingly, the day before New Year’s Eve (30 December) was seen as the fourth top spend day in 2010, followed by 23 December, two days before Christmas, which ranked as seventh within the top 10 days recorded.

Cardholders spent 39 percent, and 36 percent above the daily average amount on these days respectively. Spend was primarily driven by purchases made at retail outlets, food stores, clothing stores, hotels/motels and other services, such as health and beauty spas and shops, home repair services, government services, to name a few.

Here are other results from the survey:

Dining & Entertainment
• New Year’s Eve, 31 December 2010, was the top spend day in 2010 for consumers in the UAE in terms of spend at Restaurants.

• The day after National Day, 3 December 2010, also saw a spike in consumer spending at Restaurants. The day ranked seventh within the top 10 spend days on Restaurants.

• New Year’s Eve, 31 December 2010, was also a top spend day for consumers who wanted to enjoy recreational activities, such as golfing, visiting amusement parks or even seeing a movie.

• Consumers also enjoyed recreational activities on the first day for the months of January, February, March, April, May, June, July and December.

Travel
• Spend on travel also featured strongly in the lead-up to the summer holidays. Payments made to Airlines were a key driver behind spikes in spend on 21 June 2010 (61% more than the average daily spend amount in the Airline category). Six of the top 10 spend days on Airlines was recorded in June.

• Seven of the top 10 spend days on Travel Agencies was seen in June. The three other top 10 spend days on Travel Agencies was seen in July and November.

• Eid al-Fitr, 11 September 2010 marked the top spend day for consumers at Hotel and Motels. Other top 10 spend days for consumers at Hotels and Motels were seen in November, October and December.

Fashion & Accessories
• Consumers seemed to be updating their wardrobe on 22 and 23 October, which were marked as the two top spend days for consumers at Departments Stores.

• Five of the top 10 spend days at Department Stores were seen in February 2010.

• November was a busy month for consumers at Clothing Stores with four of the top 10 spend days for Clothing being seen in November 2010.

Electrical Appliances/Electronics
• Spend on electrical appliances was high in the month of October. High consumer spending was recorded in October, which saw seven (October 16, 18, 19, 20, 21, 22 and 23) days being marked as the highest spend days on electrical appliances. This could have been due to GITEX (17-21 Oct).