UK households to spend £3bn less this Christmas

Following high interest rates and cost of living pressures, 79% of UK consumers are planning to cut back on non-food spending during Black Friday, which takes place on 24th November, and Christmas, according to research by Retail Economics with ecommerce delivery firm ShipEngine. This is 9% higher than the year before.

Specifically, 34% of shoppers cited inflation and 22% highlighted a lack of savings as their biggest concerns heading into the so-called “golden quarter” this year – the last three months of the year when most retailers make the majority of their profits.

However, retailers appear to be more optimistic about prospects for peak trading, with almost two-thirds of online retailers surveyed predicting sales volumes to stay broadly in line with last year and 24% expecting volumes to rise on last year. The research suggests that 95% of UK consumers plan to shop on online marketplaces as they look for competitive prices and deals.

Meanwhile, UK consumers are the most likely to shop early for Christmas compared with other European countries including Germany and France, with 40% of British shoppers surveyed planning to start their Christmas shopping before October.

Richard Lim, CEO of Retail Economics, said: "The squeeze on incomes has become a war of attrition for many households who have dwindled down their savings as the cost of living crisis drags on. Savvy consumers are using all means necessary to manage their budgets by shifting more of their spending to marketplaces to search for bargains, searching for pre-loved products and starting their festive shopping earlier to spread the cost.

"Retailers will have to work harder than ever this year to keep prices competitive while catering for more demanding customers who want to shop on and offline in a manner that suits their needs."