UK festive spending rises slightly to £24.6 billion but real-term growth stalls as cautious consumers monitor finances.

Based on a recent forecast by PwC, UK festive spending is projected to reach £24.6 billion this year. While this figure represents a year-on-year increase of 3.5%, it effectively results in static real-term spending, as the rise closely aligns with the current inflation rate of 3.6%. The average spend per person is expected to increase slightly to £461, up from £449 last year. Shoppers' top priorities for this spending season include food & drink, Christmas dinner, and health & beauty products.

Consumer sentiment towards spending has shifted slightly since last year, with 15% of shoppers planning to increase their festive spend, compared to 14% who plan to spend less. This reflects a more cautious outlook than the previous year, when 20% intended to spend more and 16% less. Younger shoppers (18 to 24-year-olds) are driving much of the increased spending, with 32% planning to spend more than last year. This group also leads in average per-head spending at £541. The 25 to 34 age group follows with an estimated spend of £476 per person. In contrast, older age groups demonstrate greater caution, with those aged 45 to 54 forecast to spend the least per head (£436) and a significant portion of consumers aged 35 to 54 indicating plans to closely monitor their spending due to reduced cash availability or lower confidence in personal finances. Furthermore, women are forecast to spend slightly more per head than men, with outlays projected at £471 and £452 respectively.

When analyzing category trends, health & beauty emerges as a key growth area for consumer spending. The category is now ranked as the third-most prioritised for shoppers, surpassing adult and children's clothing as well as electricals & technology. This trend is particularly notable among younger consumers. Fashion remains a significant priority, with adult clothing ranking fourth in consumer spending intentions and 17% planning to spend more on these items.

Consumer shopping habits show a trend toward early purchasing, with 46% of consumers completing most of their shopping before the beginning of December. This strategy is primarily driven by a desire to take advantage of pre-Christmas discounts and better organization. Younger shoppers are most likely to be early birds, with 25% of 18 to 24-year-olds and 23% of 25 to 34-year-olds finishing their shopping earlier than usual. More than half of 25 to 44-year-olds had finished most of their shopping by early December. While many consumers continue to shop in early or mid-December (47%), only 8% leave their purchases until the final week before Christmas. Women show greater organizational tendencies than men, with 54% having purchased most gifts by the start of December, compared to 12% of men who leave most shopping until the last week.

The majority of festive season spending continues to shift online. A total of 64% of purchases are made through online channels, combining home delivery (55%) and click & collect (9%). This figure marks an increase over the previous two years and represents the highest proportion of online Christmas spending since the pandemic's end. Physical stores account for just over a third of purchases, at 36%.