Total value of Christmas 2022 retail sales in the UK are forecasted to reach £82.2 billion, that’s a 6.3 percent reduction on last year’s peak, according to a reports by Statista, Retail Economics and Retail Gazette.
British consumers are expected to rein in their spending this festive season as household budgets tighten amid the cost of living crisis. Nearly a fifth fewer shoppers are expected to be out and about in December this year compared to pre-pandemic, as the rising cost of living cuts into their household income.
A whopping 60% of shoppers expect to cut spending on non-essential items in the run up to Christmas, according to one retail survey.
These forecasts put additional pressure on retail businesses, which are already facing higher energy and staff costs, as well as rising prices of goods.
Most consumers cited rising prices as a major concern, as UK inflation runs near 40-year highs.
Recessionary behaviours are now surfacing as cost-of-living pressures intensify. High inflation and increasing interest rates have prompted consumers to ask themselves whether now is a good time to spend. Shoppers are likely to re-evaluate their usual shopping channels and question brand loyalty as price and value become key drivers of change over this festive season.
Meanwhile, retailers are pondering just how much additional cost can be passed onto their customer base in order to remain profitable, or even to stay afloat.
With Christmas shoppers forecasted to be nearly one-fifth fewer than before the pandemic, the outlook is not full of festive cheer.