Britons are set to spend 24.6 billion pounds on presents and celebrations over the Christmas period this year, a 3.5 per cent increase on 2024, despite a slow start to festive trading, according to a survey from PwC published on Friday (Dec 12).
With Britain's headline inflation rate running at 3.6 per cent in October, PwC's forecast would indicate flat sales on a volume basis.
PwC said average spending per UK adult is forecast to rise to 461 pounds, with the top priorities being food and drink, Christmas dinner, and health and beauty products.
Of those consumers who said they are planning to spend less, the cost of living was cited as the main reason.
Food and drink will be the category with the highest spending priority this year, with 27 per cent of consumers planning to spend a higher amount compared to last year. This is driven by grocery inflation, more family gatherings and trading up for more special products.
The research also found 15 per cent of shoppers expect to increase their spending compared with last Christmas, while 14 per cent said they will spend less. The main reason behind the consumers who said they are planning to spend less is the pressure from the higher cost of living.
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.
“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.
"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," Windsor said.