The Economy of Christmas

Once upon a time you couldn’t experience the festive period without putting the ‘Christ’ in Christmas. Sure enough, many people still embrace this side of the season, trekking through the snow to get to church on Christmas Eve, rising bright and early to get back there Christmas morning. But it’s impossible to deny that advent calendars featuring charming nativity scenes, with pictures of angels and stars and frankincense (whatever that looks like) have been transformed. Now advent calendars are an excuse to eat chocolate for breakfast, and you’re just as likely to find a little Dalek tucked into that cardboard compartment as you are to find a lamb. For better or worse, Christmas has become about commerce – presents and turkeys and trees which litter your living room with stick-in-your-feet pines.

The effects of Christmas on the Economy

So how does the Christmas period affect the economy? Well, for decades now it’s been a major driving force. Sales in most industries experience a happy boost, and some sectors which depend entirely on Christmas – who would buy a Christmas tree in July? – have a very happy boost. Back in the 1600s Oliver Cromwell abolished all kinds of Christmas related activities, and some of these took a while to get back off the ground. One such is the Christmas market, which in recent years especially has seen resurgence. These seem to crop up in more towns and cities every year, and tend to enjoy a comfortable profit. Increasingly international in scope, it is now possible to go from stall to stall experiencing different cuisines – from Moroccan to Mexican. Or you can buy an exotic gift – a hand-painted tajine, a carefully crafted, one-in-a-kind handbag. Of course, these markets can have a negative effect on the towns they inhabit – why buy a hotdog from your regular vendor when you can get an authentic German bratwurst for the same price? On the other hand, local restaurants often get involved and set up their own stores, with potential customers wandering around in a very festive spirit.

Since the Recession

In recent years the global recession has hit hard, and this has changed the way people spend their money. Whilst many retailers are remaining mildly positive, every one knows that the last few Christmases have been quiet. That’s not likely to change any time soon. In fact, according to The New York Times, some retailers are relieved at the prospect of a flat Christmas – at least things aren’t getting worse.

And some sectors are doing better than ever – particularly producers and retailers of Smart phones and tablets, whose colossal profits seem to have ridden out the recession and show no signs of slowing. Discount shops have also done particularly well in recent years, as customers look for bargains rather than top of the range products. And online retailers such as Amazon do best of all, able to offer huge discounts on a vast range of products, from books and DVDs to video games and furniture.

Most heavily hit will be the smallest retailers. At a time of economic uncertainty, consumers want to spend money on the brands they’re familiar with, and many small independent chains don’t get a look in.

Another result of the recession is that people are spending more time indoors, which means they tend to buy products they can use around the house. This has helped at-home entertainment producers, and those industries which offer practical, home-use appliances, but has hurt the more expensive areas of commerce, such as holiday and jewellery companies.

The fact of the matter is that whilst nearly everybody sees some sort of profit increase over Christmas, it may not be enough to pull them through the coming year. Low job security, minimal wage rises and a lack of disposable income are all contributing to a quiet Christmas. The only cure for the entire economy, paradoxically, is for each individual to go out and spend, spend, spend. Whether or not this is practical, or even possible, is another question.