Festive Spending Forecast To Reach £24.6bn This Year

• UK spend for the festive season is set to increase by 3.5% 

• Shoppers are expected to spend £461 per head, with the top priorities being food & drink, Christmas dinner, and health & beauty 
  
  
• Almost a third of 18 to 24-year-olds plan to spend more than last year 

According to PwC’s latest Festive Predictions Survey, UK consumers are set to spend £24.6billion on presents and celebrations over the Christmas period this year, a 3.5% increase from the £23.7billion spent in 2024. Average spending per adult is forecast to rise from £449 to £461.  

This year, 15% of shoppers say they will increase their spending compared with last Christmas, with an almost equal number (14%) saying they will spend less. This is a slightly more pessimistic outlook than this time last year, when 20% of consumers said they would spend more on festivities and 16% spend less. 

Younger shoppers are set to spend more on the festive period this year than other age groups, with 32% of 18 to 24-year-olds saying they will spend more than last year and, as in previous years, they are forecast to be the biggest spenders per head with an estimated £541. Those aged 25 to 34 follow and will have the second highest estimated spend per head of £476, with just over one in five (21%) saying they will increase their festive spend. 

In contrast, older shoppers expect to spend less this year, with 18% of 35 to 44-year-olds and 14% of 45 to 54-year-olds saying they will keep a closer eye on the purse strings this year. The 45 to 54-year-olds are also the group forecast to spend the least per head, at £436.  

In contrast to Black Friday, women are forecast to spend more than men, with a £471 outlay per head forecast. Men are projected to spend £452 per head.   

Of those consumers who said they are planning to spend less, the cost of living was cited as the main reason. More than a third (36%) say they have less money to spend, with 34% saying their personal finances have been negatively affected over the past year. Almost a quarter (24%) say they are less confident about their finances. Although the survey was undertaken three weeks before the Budget, only 15% of those consumers cutting back mentioned concerns over what would be announced by the Treasury as a reason to spend less. 

This year, the highest proportion of consumers since the pandemic (67%) have said they will be hosting or visiting extended family this year, and the fewest (21%) say they will be staying at home with immediate family.  

Christmas spending intentions  

While overall spending on Christmas is predicted to see a slight uplift, consumers’ net spending intentions (those who say they will spend more vs those who say they will spend less) are broadly in line with last year. However, there are winners and losers amongst the categories shoppers say they will be buying.  

The biggest winners over Christmas are expected to include: 

• Food and drink will be the top spending priority again, with 27% of consumers planning to spend more compared to last year. Both food & drink (+13) and Christmas dinner (+11) categories see higher net spending intention than last year due to a combination of grocery price inflation, more family gatherings, and trading up to extra special products. 

• 18% say they will spend more on health & beauty products, making it the third most prioritised category, overtaking both adult and children’s clothing and electricals & technology. Health & beauty has become particularly important for younger shoppers. 
  
  
• Fashion is the fourth highest priority for consumer spend this Christmas, with 17% planning to spend more on adult clothing this year. 

When and where consumers plan to do their Christmas shopping 

As seen in previous years, many UK consumers plan to do their Christmas shopping early. 46% say they have finished their shopping before the beginning of December. For this group, the main reason given for early shopping is a desire to be organised (34%). Just under a third (31%) want to get the best prices and 22% are looking to spread the cost of Christmas through budgeting.   

Young shoppers lead the way in terms of buying their Christmas items early, with 25% of 18 to 24-year-olds and 23% of 25 to 34-year-olds saying they did their shopping earlier than usual. More than half of 25 to 44-year-olds finished most of their shopping by the start of December. 

The majority of consumers (47%) will still do their festive spending in early-to-mid December, with 8% leaving it until the week before Christmas. Women continue to be more organised than men, with the majority of women (54%) having bought most of their gifts by the start of December, and only 4% leaving it until the week before Christmas. By contrast, one in eight (12%) men plan to do most of their shopping the week before Christmas.  

Most consumers plan to do their spending for the festive season online with more than half (55%) of purchases being carried out online for home delivery. Together with click and collect (9%), that leaves only a third of shopping taking place in physical stores (36%). The combined 64% of Christmas presents bought online is an increase on the last two years, and the highest proportion spent online since the end of the pandemic.  

Jacqueline Windsor, Head of Retail at PwC UK, said:  

“Retailers, and particularly supermarkets, will be encouraged to see consumer net spending intentions for food and drink in positive territory. Post Budget, we should see clarity on personal finances easing some of the caution we have seen this Autumn, which has contributed to a slow start to the critical Golden Quarter for some retailers. 

“For retailers, the challenge is to balance competing consumer priorities. Those who succeed will need to offer a mix of practical and joyful products at different price points to meet the needs of shoppers managing their wallets and celebrating special occasions. With almost two-thirds of festive shopping expected to take place online this year, retailers will also need to bridge digital and offline channels across the customer journey. 

“The good news is that despite the slow start to the festive shopping period, we know that the majority of Christmas shopping is done in December, and that consumers always spend more than they expect on festive presents and celebrations. So, it’s still all to play for the retail and hospitality sectors as we come into the final weeks before Christmas.” 

Source : PwC

Image : Smileus / iStock / 624124526

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