UK consumer spending over the festive period proves difficult for retailers
Christmas spending 2025 in the UK gave a season of cautious celebration. While festive spirit remained strong, spending patterns reflected the ongoing economic pressures and shifting consumer priorities. Retailers saw modest growth, but the story behind the numbers reveals how British shoppers adapted to inflation, embraced sustainability, and leaned heavily on digital convenience.
How Much Did the UK Spend This Christmas?
According to PwC’s festive forecast, UK consumers spent £24.6 billion during the Christmas period—a 3.5% increase compared to 2024. However, with inflation at 3.6%, real spending volumes were largely flat. The average adult outlay rose slightly to £461, up from £449 last year, with food, drink, and health & beauty topping the list of priorities.
Retail sales overall hit £91.12 billion across the six-week festive window, including both online and offline channels—a 3.2% year-on-year increase. Online shopping continued its upward trajectory, growing by 4.7%, while in-store sales saw a smaller uplift of 2.3%.
Gift Spending and Consumer Behaviour
Gift spending remained significant, though slightly subdued. Brits allocated £26.7 billion to presents, down from £28.6 billion in 2024—a 7% decline. The average spend per person on gifts was £514, with Millennials leading the charge at over £1,000 total festive spend, while Baby Boomers were more frugal at around £577.
Interestingly, sustainability and affordability shaped gifting trends. Micro-gifting and second-hand presents gained traction, with shoppers spending an average of £117 on pre-owned gifts. This reflects a growing preference for eco-conscious choices and budget-friendly options.
Food, Drink & Hosting Costs
Food remained a cornerstone of festive budgets. Tesco and Marks & Spencer reported a rise in food sales over Christmas, with Aldi and Lidl recording record sales, whilst Asda and the Co-Op lost out. The cost of a traditional Christmas dinner for four hovered around £32.46, thanks to supermarket price wars and promotions. Overall, households spent over £350 on food and drink, including festive tipples and treats. Rising energy costs added another layer, with an average of £105.97 spent on heating and lighting during the holidays.
Economic Pressures and Consumer Sentiment
Despite the spending uptick, caution was evident. One in five households earning under £40,000 cut back on festive expenses, prioritising essentials over luxuries. Many relied on loyalty points and vouchers, while nearly a quarter expressed lower confidence in their finances compared to last year.
The cost-of-living squeeze influenced shopping behaviour, with consumers seeking value through discounts and promotions. Premium private-label products saw an 8% growth in grocery sales, highlighting a trend toward affordable indulgence.
E-Commerce and Retail Trends
Christmas 2025 reinforced the dominance of e-commerce. Online demand stretched beyond Black Friday, with mobile wallets and AI-driven shopping experiences boosting conversion rates. Retailers offering seamless omnichannel experiences—click-and-collect, fast mobile checkout, and personalised deals—captured the lion’s share of festive spending.
Physical retail faced challenges, with footfall down 2.2% year-on-year. High streets and shopping centres saw declines, while retail parks remained flat. Boxing Day delivered a late surge, but overall, the season underscored the need for experiential shopping and digital integration. Overall, performance continued to be mixed across different retailers and sectors, which is unsurprising considering the cautious approach to spending that consumers took throughout 2025. With overall seasonal spend broadly mirroring inflation, the level of Christmas spending didn’t turn out to be the gift that many retailers were hoping for.
Key Takeaways for 2026
- Budget-conscious consumers will continue to dominate, making value-driven strategies essential.
- Sustainability and second-hand gifting are no longer niche—they’re mainstream.
- Omnichannel readiness is critical as online and offline experiences converge.
- AI and social commerce will shape future festive shopping journeys.
