The six weeks leading up to Christmas are expected to see a total expenditure of 84.9 billion pounds, with retail sales receiving a boost from high inflation rates.
According to VoucherCodes.co.uk's Shopping for Christmas Report 2023, retail spending this Christmas is projected to increase by 3.3 percent, amounting to 2.7 billion pounds more than the 82.2 billion pounds spent in 2022. However, while sales figures are set to rise, sales volume is anticipated to decline by 4.1 percent, suggesting that inflation is the primary driver behind spending, rather than consumers purchasing more items.
With the cost of living crisis affecting many budgets, consumers are expected to cut back on Christmas spending, particularly on gifts and decorations. Gift spending is forecasted to decrease by 3 percent, while decorations spending is set to fall by 19.6 percent.
The report indicates that in-store sales are on track to continue their recovery from pandemic lows, with nearly two-thirds of purchases expected to be made in physical stores this Christmas (64 percent). Consequently, total offline sales are projected to reach 54.01 billion pounds (a 3.5 percent year-on-year increase), while online sales are expected to reach 30.91 billion pounds (a 3 percent year-on-year increase).
For the first time, smartphone sales are expected to surpass PC sales, with smartphones accounting for 41 percent of online sales, equivalent to 12.52 billion pounds. In comparison, PC sales hold a 38 percent share of online sales, totaling 11.83 billionpounds in sales over the Christmas period. Retailers are increasingly focusing on social media marketing and mobile-friendly websites, making it easier for consumers to do their Christmas shopping via mobile devices.
Michael Brandy, Senior Commercial Director at VoucherCodes.co.uk, noted, “After a year of price rises and high inflation rates, it comes as no surprise that consumers are planning to cut back on their Christmas spending this year, and unfortunately, retailers are set to bear the brunt of these cuts. While retailers can look forward to increased spending, they'll need to work hard to encourage customers to make purchases during the festive season. With limited budgets, consumers will prioritize value above all else, so offering deals, discounts, and affordable prices will be essential in convincing customers to spend their hard-earned money this Christmas.”