What's on This Year's European Christmas Shopping List?

For many European countries, this year will be the first Christmas in years without high inflation or a global pandemic, though the residual impact is still felt, according to analytics firm GlobalData. With topline inflation at a manageable rate, but with food inflation remaining at a higher level than would be desirable, GlobalData predicts the emergence of three key themes that will influence European consumer spending this Christmas.

Affordable Authenticity:

For much of Europe, 2022 saw a sharp increase in inflation, and whilst 2023 saw a lower inflation rate, it was still high enough to hinder a recovery in consumer spending. For example, the UK had a CPI rate of over 9.1% in 2022, 7.4% in 2023, and 2.6% in 2024. Other major economies in both Western and Eastern Europe followed similar trajectories. Of course, lower inflation does not equal lower prices. Even where people’s wages have kept up with the CPI, specific categories, such as food and drinks, have outpaced general inflation. Another issue compounding the problem has been that food inflation has not come down with overall inflation. Indeed, food inflation increased in 2023 for several countries, with the phenomenon mainly focused on Western Europe.

“Looking at 2024 specifically, it is clear that European food inflation is only correlating loosely with general inflation trends and remains high in many major economies. European consumers are contending with a market environment that is still seeing higher inflation for key categories, but which also bears the scars of previous inflation, in the form of products that have gotten smaller and/or more cheaply made as brands tried to limit price-increases through ‘shrinkflation’ and ‘skimpflation’. Therefore, this Christmas, the concept of value for money is key,” commented Fred Diamond, Senior Food Consultant and Analyst at GlobalData.

Connoisseurship, and Food-based Learning Experiences:

One of the more persistent trends pervading Western markets in recent years has been the idea of connoisseurship, the desire by consumers to engage with food and drink they can learn more about and take a real interest in. This has a long history in wine, coffee, and chocolate, all of which have benefited from the contemporary salience of the trend. More recently, categories such as hot sauce have joined the fray. Products appealing to this trend typically come in a variety set. Indeed, products in line with this trend lend themselves well to multipacks or selection boxes which can easily be turned into ‘gift sets’.

“Products containing multiple different varieties of something, be it dark chocolate, sauces, or any other type of food, can be extremely popular during the festive period. 56% of European consumers report that ‘new experiences associated with product purchases’ are ‘essential’ or ‘nice to have, which is exactly what these types of products can bring people,” continued Diamond.

Lifestyle Subscriptions, and Meal Kits:

The subscription model has seen increased application over recent years, with brands like Hello Fresh pioneering this commercial opportunity in the food and grocery category. Meal kits more generally have also seen increased uptake. By the end of last year, 63% of Europeans reported using meal kits. “Though the worst of the inflationary period is over, as Europeans begin their 2024 Christmas shopping, they do so against a backdrop of eroded savings, smaller portions, and lower confidence. With a quarter of European consumers reporting cutting back on grocery shopping in light of recent price increases, value for money is key. Guilt-free indulgence through sustainable practices, and added value in their product purchases through brand authenticity, sensory experiences, and food or drink kits that enable people to learn and grow in their tastes and expertise will likely prove very popular,” added Diamond.