Europeans plan for frugal Xmas and tough 2009

LONDON (Reuters) - Europeans will limit spending on Christmas as they brace for a tough 2009, though shoppers in eastern countries are more optimistic than those in the west, surveys by business consultancy Deloitte showed on Wednesday.

Some 40 percent of Europeans plan to limit their end-of-year spending on gifts, while half of them will budget their festive shopping this year, up from a third in 2007, Deloitte said.

Some 60 percent of those surveyed also anticipate lower purchasing power next year.

"2008 can be expected to mark a significant change in end-of-year spending in Europe," Deloitte said in a statement.

"Retailers can expect lower sales levels than in recent years."

Shoppers across Europe are cutting back following big rises in food and fuel costs and after a turmoil in financial markets sparked fears of a global recession. However, there are variations from country to country.

In Britain Deloitte said shoppers planned to spend an average of 655 pounds on gifts, socialising and food and drink this Christmas, down 7 percent on last year and the first fall for at least a decade.

But the results were heavily affected by 24 percent of respondents, mostly middle-aged homeowners facing the biggest worries about rising bills and falling house prices, who said they would cut back.

Some 57 percent of UK consumers said they planned to spend the same this Christmas as last year, while 19 percent said they would spend more.