As we unwrap the final days of 2023 and step into the holiday season, there is a tale of retail resilience to explore as the spirit of giving and quality time with loved ones defies the challenges posed by the ever-present shadow of the cost-of-living crisis. This year’s predictions for Christmas 2023 show a remarkable upswing in retail spend, with consumers and businesses uniting to create a holiday season to surpass all expectations. With a focus on food and fashion spend, these predictions and trends show how important these social connections are to our communities after a tough few years – this year people are ready to make this Christmas one to remember!
GFK’s latest Consumer Confidence Index has risen by six points in the month of November to -24 compared to a nine-point decline in October. Although this number is still much lower than pre-pandemic levels, this is the biggest month on month improvement since March to April which is no doubt contributing to customers being willing to spend more on their Christmas season celebrations. GFK’s Client Strategy Director Joe Staton has stated, “Although the overall index score is still tracking firmly in negative territory, it is good to see that consumers are more optimistic about their personal financial situation. This shows people are thinking about their future with increased confidence and willingness to look beyond the short-term.” 
Retailers and businesses across the industry are expecting a strong Christmas trading this year with customers feeling more confident. M&S Chief executive Ken Murphy says: “I think people are determined to enjoy Christmas this year. We’re buying up on turkeys because we believe that people will want to celebrate more together and spend more time with friends and family.”
Trends and predictions show that people’s priorities are changing this Christmas season, following the pandemic and cost of living crisis, with people looking to spend more on celebrations and food rather than big, extravagant gifts. According to GlobalData, food and drink is the fastest growing sector with sales up to £2.8 billion or a 5.9% rise in the golden quarter and M&S Christmas food orders up 25% on last year in early November .
According to marketing data and analytics company Kantar, take home grocery sales
are expected to surpass £13 billion for the first time ever this December , with 64% looking to spend more on festive food this year than in 2022 . 55% of the nation say their favourite thing about Christmas is the food and drink and following years of pandemic lockdowns and spending Christmas isolated from loved ones, it is hardly surprising that families are spending more to make their Christmas get-togethers really special this year. Interestingly, there is looking to be a downturn in spend on key features of turkey (19%) and alcohol (21%), with people splashing out more on the little touches – pigs in blankets, cranberry sauce, roasties - to make the Christmas dinner spectacular.
In non-food categories, clothing and footwear is fastest growing. With 31% of Tesco shoppers saying they want a bigger celebration than in 2022, there is an eagerness to go out, celebrate and come together with friends and family this year. This is reinforced by an uptick in purchases for occasion wear ready for Christmas parties and events. Primark have said Christmas sales are up 33% compared to last year already. However, it is still obvious that costs are still forefront of customer’s and retailer’s minds, with fashion edits and seasonal lines filled with versatile pieces that can be used again and again to build several outfits over the season – a sparkly skirt for the Christmas party teamed with a festive sweater for the markets for example.
Retailers are also aware of and adapting to new spending habits this year, with beauty retail giant Superdrug extending their Black Friday & January Sales throughout the holiday season . Brand Director Jamie Archer comments on the decision to extend the sale offering up to 70% Christmas gifting saying, ““We started our Black Friday offers earlier than ever this year with the understanding that our customers want to spread the cost of Christmas now more than ever and so we’ve decided to extend some of our Black Friday deals, as well as offering more fantastic prices across a further 64 gifting products.” This move to make the most of customer spending budgets and making Christmas more affordable shows Superdrug to be prioritising customer needs and priorities during a challenging economic climate.
This story of retail resilience amidst a cost-of-living crisis unfolds as a beacon of hope and tenacity. Against all odds, an exploration into 2023’s Christmas spending predictions serves as a reminder that even in challenging times, the spirit of celebration, compassion and commerce can unite to create a Christmas season that defies and transcends all expectations. Merry Christmas!