PARK Group owner Peter Johnson has claimed the Christmas savings industry has seen signs that a growing number of consumers are turning their backs on debt.
Instead, the Park Group owner claims that people are turning to the Christmas savings clubs as a way of financing their festive spending sprees, despite the damage done to the industry’s reputation by the well-publicised collapse of Farepak last year.
Mr Johnson said: “People are getting fed up of taking on credit card debt over Christmas. It’s a very expensive time of year and people are tending to save up over the year.
“Debt is expensive. People have been taking a lot of debt on. People now realise that saving before Christmas is a better way of doing it and it has been growing year on year.”
However, that trend has been halted in its tracks by last year’s events. So far this year, the Birkenhead-based Park Group has seen a 36% decline in customers signing up to save for next Christmas.
Park Group offers a range of traditional Christmas hampers and vouchers that can be spent in 19,000 high street stores.
However, speaking in a podcast interview with Daily Post business editor Bill Gleeson, Mr Johnson said he was certain confidence in the industry would be restored by recent improvements in regulation.
Mr Johnson said Farepak’s collapse with debts of £40m marred what was otherwise a strong year for Park Group. He added: “It happened on Friday 13 October, when it went into administration and people became aware there was going to be no Christmas for 150,000 families.
“It has had an impact this year. We are about 30% down.
“We are confident that, once confidence is restored to people, they will come back.
“We have dealt with it by working with the Government agency to put money in trust accounts with independent trustees and a monitoring body called the Christmas Prepayment Association with independent directors.
“We feel when this is in place that confidence will return.
“You have to remember debt comes with a price. It has got to be repaid and it is expensive to do so.
“More and more people believe that by saving and getting £450 of virtual cash clears the expensive part of the year.” Mr Johnson, 67, said he currently has no plans to retire. He added: “I tried retirement 10 years ago and I didn’t enjoy it so I’m back in now.
“I’m very relaxed about things and while one enjoys working I may as well stay at it.”
THE full podcast interview with Mr Johnson can be heard at www.thebusinessweek.co.uk
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