Families are set to splash out on Christmas this year as expected spending hits a three year high as the cost-of-living pressure eases, according to RSM UK’s latest Consumer Outlook.
Families expect to spend an average of £760 on Christmas this year, up £158 or 26 per cent on £602 last year; and £694 in 2022. Last year consumers spent on average around a third more than expected, so 2024 average spend could break the £1,000 mark if the same overspend happens again this year.
A third of families (33%) plan on using some form of credit, including a credit card, buy now pay later arrangements, a loan or using overdraft, to fund Christmas this year. Half of all families (50%) plan on bringing forward their Christmas spending to spread the cost of purchases and take advantage of discounts such as Black Friday and Cyber Monday.
The EY Holiday Shopping Survey has also found that the consumers have started their holiday shopping earlier this year, driven by a desire to spread out their spending.
The top three categories that families plan on spending more on include Christmas presents (33%), Christmas dinner (33%) and food and drink at home (32%). Whereas the biggest cutbacks will be homeware (42%), eating and drinking out (40%) and adult fashion (37%).
“Expected Christmas spending hitting a three year high will be welcome news to retailers as families look set to splurge on Christmas presents and food and drink at home. Consumer confidence improved for the first time in three months in November, but it remains fragile and any further dips in confidence could derail expected spending,” Jacqui Baker, partner and head of retail at RSM UK, commented.
“Many retailers will be hoping that Black Friday deals can kickstart sales throughout the Golden Quarter to ensure they are in the best possible financial position going into 2025 to help offset the looming uplift in costs post-budget.”
