UK spend will increase this festive season but won’t beat inflation according to the latest PwC forecast that predicts seasonal spend of £24.6 billion.
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That would be a 3.5% year on year rise, which is close to the current inflation rate (3.6%) but still slightly behind. So in real terms, spending will be static.
Shoppers are expected to spend £461 per head (up from £449 in 2024), with the top priorities being food & drink, Christmas dinner, and health & beauty.
And importantly, plenty of 18 to 24-year-olds plan to spend more than last year.
The latest Festive Predictions Survey showed 15% of shoppers planning to increase their spending compared with last Christmas, but with an almost equal number (14%) saying they’ll spend less. This is a slightly more pessimistic outlook than this time last year, when 20% of consumers said they’d spend more on festivities and 16% spend less.
As mentioned, younger shoppers should be key as they’re set to spend more on the festive period this year than other age groups, with 32% of 18 to 24-year-olds set to spend more. And as in previous years, they’re forecast to be the biggest spenders per head with an estimated £541.
The 25 to 34 age group will be next with a spend of £476 each and just over one in five (21%) saying they’ll increase their festive spend.
When it comes to more cautious consumers, they’re mainly found in older age groups with 18% of the 35 to 44 age group and 14% of those aged 45 to 54 keeping a close eye on their spending, The 45 to 54-year-olds are also the group forecast to spend the least per head, at £436.
Among the consumers planning to spend less there’s a mix of reasons ranging from those who actually have less cash available to those who just feel less confident about their finances.
PwC also said that in a reversal of what happened around 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.
Fashion and beauty spend to rise
It added that “there are winners and losers amongst the categories shoppers say they will be buying”.
Health & beauty is among the winners with 18% saying they’ll spend more on such 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.
That said, fashion is the fourth-highest priority for consumer spend this Christmas, with 17% planning to spend more on adult clothing this year.
As for when and where consumers have shopped or will be shopping, 46% say they finished their shopping before the beginning of December, partly to be organised but also to take advantage of pre-Christmas discounts.
Young shoppers are most likely to be in this group 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.
But many consumers are still shopping in December with 47% doing it in the early or middle days of the month. Only 8% are 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. Some 12% of 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 55% of purchases happening online for home delivery. Together with click & collect (9%), that leaves only a little over 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.
