Danish consumers are spending more money this Christmas than ever before. Holiday food, gifts and trimmings are more elaborate - and costlier - than previously, and by the time the last advent candle is blown out, Danish consumers will have sunk DKK 9 billion in the nation's retail coffers. Chief economist Jens Brendstrup of the Danish Chamber of Commerce (HTS) spoke with Jyllands-Posten about this year's brisk holiday retail season.
"The rise in spending is much bigger than in previous years. Low interest rates and tax cuts have clearly given people more money to burn, and they're blowing most of it on Christmas," said Brendstrup.
As early as last Christmas, Danish consumers availed themselves of upcoming tax cuts and broke the existing holiday retail spending record of DKK 7.5 billion set back in 1999. According to Jørn Thulstrup, director of the Institute for Conjuncture Analysis (IFKA), the latest rally in retail spending is due to allayed fears for job security. IKFA recently completed a study of Danish consumer expectations for private spending in the coming year.
"Until now, people have been reticent about spending because growth was so uncertain. Now there's a sense of security, and once that happens, people aren't afraid to spend," said Thulstrup.
According to IFKA's consumer buying index, private spending over the past 10 years has remained steady at around 100, roughly the same level as in 2000. Last year's index crept up to 108 in December, but this year's Christmas month index has soared to 148 - an increase of 37 percent.
Dansk Supermarked, which annually posts nearly DKK 23 billion in turnover from its family of grocery chains including Bilka, Netto and A-Z, is also forecasting an increase in Christmas sales.
"We're wary Jutlanders, so we don't tally the final figures until all the Christmas returns have been made in January, but it's looking good," said Dansk Supermarked information director Poul Guldborg.
Things are looking good for 2005 as well. IFKA's analysis has shown that brighter economic developments aren't just limited to the retail sector - all private spending industries are set for robust developments next year.
"Consumer expectations for new car purchases have already reached a level that we normally only see during the spring months, so we're going to see a lot of cars sold next year," said Thulstrup.
In the longer term, increased spending will translate to more jobs and greater economic prosperity.
According to HTS, retail employment figures have shown continuous growth since last Christmas, and are likely to continue growing in 2005.
Despite the rosy outlook for next year, Denmark still has a long way to go to catch up with the Americans - the undisputed world champions of private consumer spending. Danish consumer spending represents just under half of the nation's total commercial turnover, while American private spending accounts for two out of every three dollars in circulation.
"We're moving in on them - and our forecasts are predicting more people at work, precisely because spending is still so high," said Jørgen Thulstrup