Early Predictions Reveal Christmas Spending Set to Hit Record £84.7BN

UK shoppers are set to spend a record £84.7bn during the six weeks leading up to Christmas this year, as the nation prepares for its first unrestricted Christmas since the Covid-19 pandemic began. 

The VoucherCodes.co.uk Shopping for Christmas 2021 report, forecasts a merry Christmas for retailers, as it predicts sales will exceed pre-pandemic levels for the first time in two years. 

Retail sales are expected to rise by 6.3% compared to the same Christmas period in 2020 (£79.7bn), during which the UK was under national lockdown from 5th November to 2nd December, negatively impacting retailers during the early part of the Christmas shopping season, and forcing Black Friday promotions to become online-only events. This was followed by the introduction of a tiered regulation system on 21st December, which placed London and the South East under tier 4, forcing non-essential retail stores to close in these areas, dealing retailers a damaging blow during their most lucrative time of the year. 

In a promising sign of recovery for the retail industry, sales are expected to exceed the £83.13bn made during Christmas 2019 by 1.9%, as physical stores are all expected to remain open throughout the entire festive period.

On average, consumers are expected to spend £1,275 per head on preparations for Christmas this year, £76 more than in 2020. However, Londoners (£1,745), those in the South East (£1,468) and East of England (£1,341) are all forecast to outspend the national average as they get ready for a restriction-free Christmas. 

After last year’s ‘cancelled Christmas’, shoppers in every region of the UK are preparing to spend more on Christmas festivities than last year. London and the South East are the regions predicted to spend the most this Christmas, with shoppers in London forecast to spend a whopping £15.6bn in total and those in the South East closely following behind with £13.4bn. 

Retailers in the North West, West Midlands and Scotland are poised for the biggest year-on-year profit increases, as those living in the North West are forecast to spend 10.5% more than they did in 2020, whilst those in the West Midlands and Scotland are set to increase spend by 9.5%, well above the national average increase of 6.3%.

With restrictions on socialising lifted this Christmas, consumers are expected to increase their spending on gifts compared to Christmas 2020 as many look to make up for restricted gift-giving and socialising last year. Shoppers are set to spend £12.44bn on gifts alone, 6% more than in 2020 (£11.73bn). However, as a result of ongoing supply chain issues, coupled with financial concerns brought about by the pandemic, rising taxes and energy prices, gift spending will struggle to reach 2019’s peak of £13.67bn. 

When it comes to the top gifts for Christmas 2021, the report predicts that shoppers will fork out the most on consumer electronics (£2.7bn), toys (£2.34bn) and clothing and footwear (£2.06bn). 

Angus Drummond, Senior Director, Commercial at VoucherCodes comments: “As the retail industry gets back on its feet recovering from huge challenges of the pandemic, our report’s prediction for this Christmas is the welcome news the industry has been waiting for.

“Last year’s store closures and lockdown regulations were devastating for many retailers, so it’s particularly encouraging to see that sales will not only recover from 2020, but will exceed pre-pandemic results. This Christmas could mark the start of the turning point for brands hopeful for a profitable 2022.”