Christmas sales in Iceland are expected to increase by 10.3 percent from last year, and retail sales are expected to reach ISK 85 billion (USD 763 million, EUR 690 million), excluding value-added tax, in November and December. This would be the largest increase in Christmas sales between years since the banking collapse in 2008, mbl.is reports.
The forecast was published by the Center for Retail Studies. Based on the forecast, every Icelander will on average spend ISK 53,813 (USD 483, EUR 437) on season-related retail purchases in November and December. Last year, that amount was ISK 49,156 (USD 441, EUR 399), which means an increase of 9.5 percent. At the same time, there has been a population growth of 1.1 percent.
The strength of the Icelandic króna compared to other currencies is far beyond expectations. Thus, the chances of prices staying steady, or even decreasing, are greater. Despite an increased purchasing power, consumption has not increased at the same rate, meaning that people are not spending beyond their means. Compared to other periods of economic growth, spending seems to be characterized more by moderation than excess.
This Christmas season, Icelanders are expected to spend more on good food and fine wine than they did last year. The sale of electronics for recreation is believed to go up, as is the sale of furniture and clothing.