Typical households will spend more than £500 on Christmas – a total of around £2billion more than last year – in a make or break period for retailers.
Around 20 per cent of all retail spending occurs in November and December and will add up to a mammoth £82billion with festive food taking up the lion’s share.
The figures come from the British Retail Consortium (BRC), which predicts the total will around £2billion – 2.5 per cent – higher than in 2018.
This year has been characterised by thousands of shop closures and the decimation of town centres amid economic uncertainty and a shift to online shopping.
Retailers, particularly fashion and tech firms, have been running permanent sales for weeks in a desperate bid to grab a share of festive spending.
The BRC points to failing consumer confidence against the background of Brexit uncertainty but, on the plus side, it suggests recent increases in wages could encourage spending.
Around 20 per cent of all retail spending occurs in November and December and will add up to a mammoth £82billion, with festive food taking up the lion’s share (file photo)
Based on historic trends, it says spending on food increases by 16per cent in the run up to Christmas compared to a normal month, while the figure for alcohol, including party fizz, leaps by 39per cent.
It said Bank of England research suggests spending on fashions rises by 43per cent above the monthly norm, both on gifts and party clothes, while toiletries and beauty product gift packs go up by 56per cent.
Spending on computers, laptops and tablets typically increases by 68per cent, with a rise of 85per cent on books and 116per cent on music, led by a revival of vinyl LPs, and film.
The BRC report on festive spending said: ‘The ONS saw over £80 billion spent in December and November last year.
‘According to our BRC-KPMG Retail Sales Monitor, sales growth year to date has averaged a relatively meagre 0.1per cent. However, we expect November and December sales to grow at a higher rate, which would mean total spending of approximately £82 billion this festive period.’
It added: ‘According to the Bank of England, a typical UK household spends approximately £2,000 per month, but when Christmas rolls around this increases by an extra £500.
‘The anaemic sales growth seen over the course of the year is expected to pick up slightly in the festive season. A contributing factor is the extension granted to Brexit from the end of October to the end of January, which is expected to aid a slight release of latent demand in the market.
‘This demand has built up due to the persistence of real wage growth throughout the year, which so far has been held back by consumers who have increased their levels of savings.
Retailers, particularly fashion and tech firms, have been running permanent sales for weeks in a desperate bid to grab a share of festive spending (stock image)
‘On the other hand, the spectre of Brexit does remain on the horizon, which coupled with the General Election during the height of the festive period, may stifle spending due to the ramping up of political uncertainty and doubts this could raise regarding the economy in the short to medium term.’
The BRC said almost half of all retail spending – 44per cent – in December last year went on food and it expects the same pattern in 2019.
The group confirmed the switch to using online stores, which poses an existential threat to many traditional town centres, saying: ‘More Christmas gifts than ever will be bought online this year.
‘Consumers are becoming more accustomed to online retail at the same time as improvements in delivery services and click and collect are enabling more online shopping well into the final week before Christmas.’
It suggested the proportion of all non-food products, everything from clothes and shoes to TVs and laptops, bought online could reach a new record of 35per cent for November, which included the Black Friday sales event.
The number of people visiting real bricks and mortar stores appears to be in permanent decline, however the BRC says high streets will still be busy in the final days before the festive break.
It said: ‘Many consumers head to stores to buy last minute presents and Christmas dinner supplies, with others making the most of last-minute click-and-collect services.
‘The weekend before Christmas will be the busiest days for stores, although with Christmas Eve falling on a Tuesday, we are likely to see some of the activity which was concentrated on the weekend last year, spilling over into Monday 23rd and Tuesday 24th.’