November 28 2017 Poles are lending more and more, which does not mean that they are getting worse. Salaries are rising, along with the demand and creditworthiness of individual consumers. However, this situation has the other side of the coin, inflation is also rising, which means price increases. This year prices have been rising fastest in several years. How will this affect holiday spending? Find out if the increase in prices will contribute to greater interest in consumer loans in the pre-Christmas period.
Expensive Christmas shopping
Prices in Polish stores have been rising since the beginning of the year. There is no indication that they were to slow down before Christmas. Forecasts say that the upward trend is continuing. Christmas shopping will strain your pockets. Price increases can be felt the most when buying basic products. According to the Central Statistical Office in 2017, food prices increased the most – prices increased by 5.8%. This year, the Polish family plans to spend PLN 342 on Christmas delicacies, while the entire budget declared is PLN 882 1 . Such a large one-time expense induces some compatriots to finance Christmas with a Christmas loan. This solution may enjoy greater popularity than a year ago, because in 2017 Poles will have to reach deeper into their pockets. They will feel it especially when butter, eggs, meat (both beef and pork), dairy products and fruit and vegetables are on the shopping list. Apart from the increase in butter prices, the biggest impression is made by egg prices. According to the Polish Press Agency, egg prices in October were 40% higher. in relation to June prices, and it is possible that before Christmas they will be even more magnificent.
What are the reasons for rising food prices?
Inflation in Poland in 2017 oscillates around 2%. Increases in food and energy prices have a significant impact on this situation. Where should you look for the reasons for this price gallop? Why did butter increase in price almost twice? Where do the rising prices of eggs come from? There is no reason for rising inflation. For example, eggs become more expensive because domestic supply has fallen. Fipronil, a toxic substance that has been detected on farms in Western Europe, is the culprit. The fipronil scandal caused Polish producers to see a significant increase in interest in native eggs in the countries of the “old Union”. Exports to the west contributed to the increase in prices on the Vistula. The reasons for the increase in butter prices should be looked even further, because in the US and China. In 2017, a much larger demand for this product could be observed in the two countries mentioned above. Increased interest in two huge markets combined with a decrease in butter production resulted in horrendously high prices known from store shelves. The most prosaic reason lies at the root of price increases for fruit and vegetables – we can blame the poor weather conditions.
However, inflation is also affected by less objective factors. Prices often rise together with wages. Higher wages of Poles drive demand. Since consumers are buying more, producers are trying to take advantage of the situation. How? Raising prices. The combination of price increases and demand often also results in increased demand for loans that serve the satisfaction of Poles’ consumption needs. As in the lens, it can be seen before Christmas – before Christmas and Easter, interest in loans increases.
Planning your home budget before Christmas
Since Poles are waiting for dear Christmas, it is worth preparing for them. There are methods to reduce Christmas spending. By planning your home budget well in advance, you can save a lot on holiday shopping. People who stock up on presents in November can hunt a lot of products at promotional prices. All they have to do is go shopping on Black Friday or Cyber Monday.
Black Friday in Poland, similarly to the rest of the world, falls on November 24. It is a day when sellers offer customers products at very attractive promotional prices. Cyber Monday works the same way, i.e. Monday after the weekend set by Black Friday, with the difference that it is intended for online sales.
Aside from buying presents during promotions, it’s a good idea not to wait until the last days before Christmas. Do not fund your accumulated expenses during the highest Christmas fever. If you don’t leave your purchases at the last minute, you may avoid having to repair the budget with an online loan. By assigning expenses for Christmas two or three months earlier, it is easier to predict the budget and any gaps in it. If you already know in October that you will run out of several hundred zlotys in December, ask your family or friends for a loan. They are more likely to help you in October than just before Christmas, when a large part of the budgets can barely be reached. Fortunately, as the results of the Deloitte study show, a smaller and smaller group of consumers leaves shopping at the last minute. This year it will be 6 percent less than last year.
In turn, before you start filling shopping baskets with kilos of groceries, remember last year’s Christmas. How much food from the Christmas table was wasted in 2016? Throwing out Christmas dishes doesn’t have to be a holiday tradition. Save yourself expenses, don’t buy what you don’t need.
Will consumer loans finance Christmas?
The dynamics of consumer credit market development is positive. Such a conclusion results from a cyclical study organized by the Conference of Financial Companies in Poland and the Institute of Economic Development of the Warsaw School of Economics. The upward trend on the loan market should strengthen in the last year’s months. These data, combined with the information that Poles take out consumer loans, most often for the purchase of everyday items 2 , suggest that in many families the beginning of 2018 will be associated with the need to repay holiday loans.
Since countrymen plan to spend less than PLN 900 on organizing Christmas, it is difficult to assume that they would need large sums from external sources. A large proportion of consumers will probably ask loan companies for help. The non-bank segment is gradually increasing the share in the loan market to PLN 4,000. In 2016, 25% benefited from low-value non-bank loans. borrowers. Online loans are supported by easy and quick access, which is a huge advantage when we are looking for financing just before Christmas.