Saving the Christmas campaign should be the priority. In a 2020 devastated by COVID, the Christmas contribution is essential to cushion the blow at the end of the year.
Like every year, Christmas is approaching, and with it comes the Christmas campaign. A campaign in which businesses prepare to experience one of the most special and sweet moments of the year. By this time, the shop windows are already displaying their characteristic Christmas decorations, while the streets are filled with consumers who go to the shops to buy the long-awaited Christmas gifts. The restaurants, crowded with staff and customers, are saturated with the characteristic lunches and dinners on these dates, while the airports manage the numerous suitcases carried by all those citizens who, like every end of the year, return home To be with the family.
Like every Christmas, these dates have a significant impact on the different economies throughout the planet; product of a consumption that does not stop growing, as Christmas Eve approaches and, in those places where it is celebrated, Three Kings Day. On the other hand, hiring, in the same way, does it in the same intensity; Well, in a scenario in which the influx of customers is skyrocketing, the required staff is higher than on other dates. Thus, we are talking about a date that highlights the seasonality factor in its maximum splendor; by registering an economic boost that has come to leave in countries like Spain, a whopping half a million employees, as well as spending close to 11,000 million euros, and most importantly, in just one month.
And it is that, if it were not for the situation that happens to us today, this should be Christmas in 2020, as we related in the introduction. However, in a scenario like the current one, the fear, as well as the risk, that the aforementioned ornaments in the shop windows, in the new context, will be replaced by the “transfer” sign is increasing.
With the arrival of the last weekend of November, Black Friday, as well as Cyber Monday -with a representation of 25% of Christmas spending-, are days that mark the beginning of a Christmas campaign that will remain in the memory of millions of citizens all over the planet. The presence of COVID in 2020 leaves expectations that, reflected in the data, show us a collapse of economic activity in the Christmas months; at least if the contrast is based on the comparison of said year with previous years. Well, we must know that, meeting these same expectations, COVID, as if it were The Grinch, has set out to snatch away all that breath of fresh air that, as in previous years, Christmas left us at the end of the year.
A breath of fresh air
Taking into account variables such as spending, the Christmas campaign in countries like Spain leaves an accumulated expenditure that, in relation to the indicators available from previous years, amounts to 11,000 million euros. In just one month, economies such as the Spanish economy mobilize about 1% of their gross domestic product (GDP) in consumption directly related to the Christmas season. In this sense, we have taken Spain as a reference, because that country, as reflected in the reports made by the consulting firm Deloitte in this regard, is situated as the economy in which its citizens spend the most during the Christmas season; surpassing the United Kingdom, which moderates its spending compared to the peninsular country.
But this does not mean that other economies, taking into account the same indicators, do not spend as large as the one registered by Spain. In this sense, Mexico, as reflected by these same indicators, is another country that has not stopped increasing spending at Christmas, in those contrasts with past years that have been published. Thus, we are talking about the fact that the Aztec economy, taking into account the variation rate in Christmas spending in previous years, increased its spending by 14% in 2019, in contrast to the data released in 2018. A similar spending to the attack by Chile, as well as other economies that, like Peru, lead the ranking of Latin American economies with the highest Christmas spending. And the fact is that, if we take into account the population in these territories, we are talking about an accumulated expenditure well above the expenditure registered by Spain.
On the employment side, we must know that in the same way that consumption increases, businesses, as well as the main sectors that, like this one, are interested, try to strengthen their workforce to be able to absorb this greater influx of commented clients . In this sense, economies such as the Spanish, during the Christmas months, register a growth in hiring that has reached, in years like the past, half a million hires in just one month. A volume of contracts that also has a conversion to permanent employees that is around 25%, as reflected in the indicators. In addition, by the way, we are talking about a more symmetrical hiring between sectors, which indirectly benefit from this situation.
But as we said in the previous paragraph, we are talking about hiring that, in the same way, occurs in other Latin American economies. In this sense, even in times of COVID, hiring for holidays directly related to Christmas, such as Black Friday, in countries like Mexico amounted to more than 200,000 formal contracts; taking into account a labor informality close to 60%, the real figure would leave us with an even higher volume. Likewise, in other economies previously analyzed, such as Chile, the volume of contracts estimated in previous years for Christmas increased by around 25%; Another piece of information that shows the increasingly general trend of widely reinforcing the workforce for the Christmas season.
As we can see, the contribution of Christmas to the economy, taking as a reference some of the economies that, such as Spain, Chile, Mexico or Peru, were cited, is quite bulky. The Christmas bill, in contrast to other months, is higher for all households in the country, in the same way that its economic contribution to the economy in general, as well as to the sectors that comprise it, is much more dimensioned than the contribution expected from other seasons throughout the year. Well, we must know that we are talking about Christmas, a date that, in addition to hope, leaves great optimism in those merchants who see how this campaign is reflected in their annual accounts at the end of the year. In addition, we are talking about growing spending, since every year there are increases in the per capita spending prospects that are extracted. A perspective that, despite having performed very well in previous years, this year is expected to moderate very downward.
A different year
Both in terms of spending and employment, Christmas represents a great respite for the economy, as well as all those socio-economic agents that participate in it. However, in the new context, the figures that were handled a priori, today could suffer a turnaround that, as has happened with other festivities throughout this year, puts an end to this brief dream that, every year, allows us to close the year, as well as starting the next, with that characteristic impulse that the Christmas campaign leaves us.
In this sense, it is convenient to know that, for sectors such as the hospitality industry, in countries like Spain, Christmas accounts for about 30% of the annual turnover of this sector; a representation that, taking into account the year that the sector is going through, this year could shoot up to 60%. For this reason, taking this example, we can get an idea of how necessary this campaign is in years like the one we are going through.
Thus, the outlook for Spain, as far as spending is concerned, leaves us with a drop in the figures that, in relation to past years, could be -48%. As we can see, about half of the citizens in the country pretend not to spend everything they spent in previous years. On the other hand, countries like Mexico, and taking into account the figures given for this by the Nielsen consultancy, show us, like Spain, a general decline in sales for this Christmas. In this sense, the report we are talking about reflects that about 60% of Mexicans will reduce their spending this year, so the spending figure in the Aztec economy, in the same way, will moderate at the end of the year.
In addition, we are talking about a situation that not only occurs in Spain and Mexico, but is also expected in other Latin American economies, where the Argentine economy should be highlighted.
On the hiring side, expectations show a drop in hiring close to 38% for Spain. In this sense, we are talking about the fact that about 150,000 jobs will not be created this year, given the effects of COVID. A situation that, in the same way that occurred with spending, will be repeated in other Spanish-speaking economies in Latin America. And it is that, taking into account that Black Friday in countries like Mexico, according to the Infojobs portal, already leaves us a drop in job offers of -62%, little can be expected from a Christmas campaign that, unlike from other years, it will leave some unusual employment figures for a campaign like the one that is being celebrated.
In short, we are talking about a campaign that, despite being more necessary than ever, plans to take place in a very different way than in past years. COVID has frustrated a Christmas season that, taking into account the economic situation, would have enjoyed great relevance for the different economies around the planet. And it is that we must not forget that we have days until Christmas, and that we must intensify measures to contain the virus; Well, the data shown here, as with the prospects, are by no means the worst data expected for this Christmas.