Spending is set to hit £84.9bn over the six weeks leading up to Christmas, as high inflation rates give retail sales a boost.
VoucherCodes.co.uk’s Shopping for Christmas Report 2023 revealed a 3.3% rise in retail spending this Christmas, with sales increasing £2.7bn from the £82.2bn spent in 2022.
But although sales figures are set to rise, sales volume is forecast to decline by 4.1% indicating that inflation is the primary driver behind spend, rather than consumers purchasing more items.
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As the cost of living crisis continues to eat away at budgets, many consumers will be cutting back this Christmas and sales of gifts and decorations are predicted to be worst hit.
Gift spend is forecast to fall 3% to £11.25bn from £11.59bn, and decorations spend is set to fall 19.6% from £0.82bn to £0.66bn.
The report shows in-store sales are set to continue to recover from their pandemic low, with almost two-thirds of purchases set to be made in-store this Christmas (64%).
As a result, total offline sales are forecast to reach £54.01bn (+3.5% YoY), whereas online sales figures are more modest at £30.91bn (+3% YoY).
VoucherCodes.co.uk senior commercial director Michael Brandy said: “After a year of price rises and high inflation rates, it comes as no surprise that consumers are planning on cutting back on their Christmas spending this year, and unfortunately retailers are set to bear the brunt of these cuts.
“Whilst retailers can look forward to a rise in spend, they’ll have to work hard to encourage customers to make purchases over the festive season. With limited budgets, consumers will be prioritising value above all else so offering deals, discounts and affordable prices will be vital in encouraging customers to part with their hard-earned cash this Christmas.”
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