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Sandra Halliday Published
October 27, 2025
The retail spending reports for the festive season are coming thick and fast at the moment, but the latest one is particularly interesting because it’s actually forecasting a sales rise — albeit one that comes with a volume fall.
VoucherCodes, which releases such predictions every year, thinks retail spending will rise by 3.3% to £84.9 billion, but sales volumes will drop 4.1% as cash-strapped consumers face higher prices.
This year’s spending will be £2.7 billion higher than in 2025 but that 3.3% increase is dwarfed by inflation, which has been in double-digits this year and remains much higher than the percentage increase.
VoucherCodes said many consumers will be cutting back this Christmas and sales of gifts and decorations are predicted to be worst hit. As a result, gift spend is forecast to fall 3% to £11.25 billion from £11.59 billion, and decorations spend is set to fall a massive 19.6% from £0.82 billion to £0.66 billion. That will presumably come as consumers make do with the decorations they already have.
But it looks like some spending areas will be prioritised with the travel sector forecast to see a 15.2% rise in spend and sales totalling £2.18 billion.
Meanwhile, 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 £54.01 billion, a 3.5% rise, while online sales will rise 3% to £30.91 billion.
The report also said more consumers going online are choosing to do their Christmas shopping via mobile devices.