Christmas retail spend expected to drop by £2bn due to cost-of-living crisis 

The research shows that an estimated £82.2bn is forecast to be spent this Christmas, down not only on the five-year peak seen in 2021, but also the pre-pandemic spend seen in 2019.  

In 2019, prior to the outbreak of Covid-19, Christmas sales across the UK hit £83.1bn, a huge 8.1% increase on the previous year. Following pandemic restrictions just weeks before December 25, the total value of the UK’s Christmas spend fell by -4.1% to £79.7bn in 2020.  

However, in 2021 total retail sales hit £84.2bn, a 5.6% year-on-year increase and the highest Christmas spend in five years.  

According to the data, it’s expected that total retail sales will dip by -2.3% in 2022, with the economy seeing a reduced spend of £2bn.  

While London and the South East are expected to see the highest total retail spends this Christmas period at £14.8bn and £12.8bn respectively, they are also two of the top three regions expected to suffer from the greatest decline in consumer sentiment.  

In fact, the research shows that total Christmas spend is expected to fall by -4.4% in the South East and -4.3% in London when compared to 2021, with only the North West seeing a greater decline at -5.2%.  

In the North East, retail sales are expected to dip by -3.6%, with the East Midlands (-2.3%) and East of England (-2.2%) also expected to see a reduction of more than two per cent in total Christmas spend.  

Bradley Post, CEO of RIFT Tax Refunds, said: “The average household spent just over £3,000 within the retail sector last Christmas and this increased spend brought a very welcome boost to a sector that had suffered greatly during the pandemic.  

“Unfortunately, this return to health looks to be short lived, with the cost-of-living crisis expected to dampen consumer sentiment considerably this year.  

“The only silver lining is that, while we expect to see the nation tighten their belts this Christmas, the total contribution to the economy via the retail sector will sit above the pandemic low seen in 2020.”