‘Revenge shoppers’ are just what retailers need this week

As people can’t do things they would like to thanks to Covid, they will end up spending on themselves and their homes, writes Hamish McRae

Christmas shoppers in Bristol city centre. Though savings are at a historical high, that has not stopped people spending (PA Wire)

This is the week for “revenge shopping”. At its crudest it is venting our fury about the state of the world by buying stuff. More thoughtfully, it is using some of the financial firepower built up over the past 18 months to make for a less gloomy holiday season. If we are not able to spend money on partying or foreign travel, then we will spend it on things we can enjoy in the home.

The background is widely appreciated. The two industries hardest hit by the Covid-19 pandemic are indeed hospitality and travel. Here in the UK uncertainty over omicron has led to a slump in restaurant bookings according to OpenTable, and in hospitality jobs on offer according to Adzuma. As for travel, there has been a string of people cancelling their flights at Heathrow as a result of business people fearing they might have to quarantine if regulations tighten further. So in November numbers going though the airport were only 40 per cent of pre-Covid levels, despite the US opening up to British and European travellers.

But if people cannot spend as planned, they can do two things. They can save the money, or they can spend it on something else. As far as savings are concerned there was more than £150bn of so-called excess savings in the middle of this year, and while the savings ratio had come down from lockdown peaks to 12 per cent of national income that was still the highest since the middle 1990s. We will get more up-to-date numbers just before Christmas, but meanwhile the message remains that taken overall, people are still saving at a historically high rate.