Fashion still top of gift lists, but some consumers rein in spending this season

On the plus side, a survey of 1,000 people by out of home media and infrastructure company Clear Channel UK showed Britons “refusing to let the cost of living crisis ruin their Christmas and they plan to spend roughly the same amount of money on Christmas gifts as last year”.

The number of people planning to spend a large amount and those planning to spend very little has remained fairly static this year, although there's more change being seen in the middle-upper range of spending.

Around 6% of people plan to spend over £1,000 this Christmas — the exact same percentage as last year — while 11% of people have budgeted £50 or less for Christmas gifts and 8% of people plan to spend nothing at all, replicating the figures from 2022. As for mid-range spenders, 23% have budgeted £101-£200 for Christmas gifts in 2023, which is up from 21% in 2022. The amount of people planning on spending £51-£100 has also risen from 16% last year to 17% this year.

The biggest change in spending comes from the £401-£1,000 bracket. This is the amount 13% of people plan to spend this year, compared to 16% last year. It looks like those aforementioned increases further down in the mid-range could have been a result of mid-upper spenders scaling back.

Only 25% of people plan to do their Christmas shopping online, while 34% plan to shop on high-street. The majority of people (41%) prefer to use a mixture of online and in-store shopping.

The most purchased gifts are clothing (35%), with 26% buying toiletries & cosmetics (26%) and toys (27%), although the balance of these categories differs depending on the gender of the person spending. The most purchased gifts by women are clothing (43%), toiletries & cosmetics (35%) and toys (34%), while the most purchased gifts by men are clothing (28%), food & drink (21%) and toys (20%).

Meanwhile, although the above figures show overall spending on Christmas not changing radically, new research from the Gift Card and Voucher Association (GCVA) shows a different picture. It reveals that shoppers plan to rein in gifting budgets specifically amid the ongoing strain on household finances. 

It said 44% of UK adults are reducing budgets for gift buying with just under half of UK households worse off than this time last year and 12% experiencing a ‘significant’ worsening of their personal finances.

To keep Christmas spending in check, some consumers are making the switch from physical gifts to gift cards. Some 14% of adults intend to increase the amount they spend on gift cards to control present buying budgets and avoid any wasted spending on unwanted gifts. 

The appetite for increased purchase of gift cards is highest among Gen Z and Millennial consumers, with 28% of those in the 16-34 age group more likely to give a gift card because of the cost of living crisis.