Christmas spending is forecast to hit a record high of £91.12bn this year as consumers splash out on their festive shopping despite the high inflation rate and cost-of-living concerns.
Research from VoucherCodes.co.uk’s Shopping for Christmas Report 2025 forecasts a 3.2% rise in sales across the six-week festive period (from mid-November to the end of December), with gifts, food & drink and holiday travel driving growth.
However, whilst the total retail sales value is set for an uplift versus previous years, volumes are forecast to decrease by 0.3% for the first time since 2023 as higher prices impact consumers’ spending power.
Spending on Christmas gifts is forecast to rise 2.1% £11.59bn, equating to an average of £443 per household and 50.5% of all festive sales.
Food and drink spend is expected to be lower (£8.36bn), but is the category that will see the highest growth rate, up 3.6% amid surging inflation in the sector.
Holiday travel is also expected to do well this year, accounting for £2.36bn of all sales across the festive season, while decorations are forecast to see the lowest retail sales, accounting for £0.63bn (+0.3%) of total retail sales.
This year, both online (+4.7%) and offline sales (+2.3%) are forecast to see growth. Despite online shopping’s strong growth, almost two-thirds of all Christmas retail spend will take place in stores (62.7%), accounting for £57.1bn of total spending across the festive period compared to £34.0bn online.
Almost half of UK consumers plan to make a festive purchase in a supermarket (48%), with a further 40% heading to the high street.
Moji Oshisanya, Chief Commercial Officer at VoucherCodes.co.uk, commented: “It’s looking like another sparkling Christmas for retailers this year. All categories are expected to see uplifts in sales across the festive period, with consumers determined not to let budgets put a dampener on celebrating the festive season in style.
“However, with inflation at such a high level, UK consumers are increasingly on the hunt for ways to help their money go further. With one-fifth of consumers actively looking for discount codes to boost their Christmas budgets (22%), retailers should be prepared to offer savings and limited-time offers to encourage this money-savvy audience to spend with them instead of with competitors. When budgets are tight, value is all-important.”
NAM Implications:
- Realists still see inflation-induced volume drops.
- And savvy consumers shopping around for value.
- That said, there will be some highlights available for those who can take the opportunities to grow at the expense of rivals.
- Those that need to have it spelt out have already missed the boat…
