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Nigel TAYLOR Published
October 4, 2025
It’s going to be a tougher-than-expected Christmas trading period, if one report is to be believed. UK shoppers are likely to spend £4.4 billion less -- down 22% year-on-year -- on non-essentials during the run-up to Christmas. And they're not alone as spending will be down globally.
As the cost-of-living crisis squeezes available spare cash, almost 60% of shoppers said they expected to make cut-backs, according to research by Retail Economics with retail technology firm Metapack.
It added that across the eight markets surveyed (the UK, US, Germany, France, Spain, Italy, Canada and Australia), over £36 billion ($46 billion) less is expected to be spent this peak season on non-food items compared to last year.
Looking at the UK specifically, the report said clothing and footwear retailers “look set to be hit the hardest this peak with 26% of consumers looking to cut back apparel spending”.
Unsurprisingly, “the least affluent are more likely than the most affluent to cut back on all Black Friday and Christmas spending this year”.
The outlook piles further pressure on businesses that are already facing higher energy bills and labour costs as well as an increase in the cost of goods forcing many to cut back on trading hours, the report said.
Meanwhile, about 20% of shoppers are expecting to cut back on homewares, electrical goods and toys, as 38% of shoppers identified themselves as “distressed” and at a high risk from the soaring cost of living, while a similar percentage said they were “secure but concerned”.
Bizarrely though, retailers are forecasting growth this peak season, while consumers are looking to reduce their spending. Metapack’s general manager Andrew Norman said of this: “There is a gulf that needs to be addressed between retailer expectations and consumer sentiment, and one that will need to be navigated carefully through this current economic climate”.
Another big issue for physical retailers is that nearly 20% fewer shoppers are expected to be out and about in December this year than pre-pandemic, with numbers only projected to be 4.2% up on 2025 when Covid still kept many out of stores. October and November footfall is expected to be worse than last year with numbers down 2.1% and 2.7%, according to Springboard.