Retail sales are expected to rise by 6.3% compared to the same Christmas period in 2020 (£79.7bn), during which the UK was under national lockdown from 5th November to 2nd December, negatively impacting retailers during the early part of the Christmas shopping season, and forcing Black Friday promotions to become online-only events. This was followed by the introduction of a tiered regulation system on 21st December, which placed London and the South East under tier 4, forcing non-essential retail stores to close in these areas, dealing retailers a damaging blow during their most lucrative time of the year.
In a promising sign of recovery for the retail industry, sales are expected to exceed the £83.13bn made during Christmas 2019 by 1.9%, as physical stores are all expected to remain open throughout the entire festive period.
UK Christmas sales 2019 – 2020 actuals & 2021 forecast
Retail sales 2019
Retail sales 2020
Retail sales forecast 2021
YoY growth 2018 – 2019
YoY growth 2019 – 2020
YoY growth forecast 2020 – 2021
On average, consumers are expected to spend £1,275 per head on preparations for Christmas this year, £76 more than in 2020. However, Londoners (£1,745), those in the South East (£1,468) and East of England (£1,341) are all forecast to outspend the national average as they get ready for a restriction-free Christmas.
After last year’s ‘cancelled Christmas’, shoppers in every region of the UK are preparing to spend more on Christmas festivities than last year. London and the South East are the regions predicted to spend the most this Christmas, with shoppers in London forecast to spend a whopping £15.6bn in total and those in the South East closely following behind with £13.4bn.
Retailers in the North West, West Midlands and Scotland are poised for the biggest year-on-year profit increases, as those living in the North West are forecast to spend 10.5% more than they did in 2020, whilst those in the West Midlands and Scotland are set to increase spending by 9.5%, well above the national average increase of 6.3%.
UK regional Christmas spending: 2020 actuals and 2021 forecast
Spend per head (£)
Total spend (£ millions)
YoY Growth (%)
Yorkshire & Humberside
East of England
Shoppers are set to spend £12.44bn on gifts alone
With restrictions on socialising lifted this Christmas, consumers are expected to increase their spending on gifts compared to Christmas 2020 as many look to make up for restricted gift-giving and socialising last year. Shoppers are set to spend £12.44bn on gifts alone, 6% more than in 2020 (£11.73bn). However, as a result of ongoing supply chain issues, coupled with financial concerns brought about by the pandemic, rising taxes and energy prices, gift spending will struggle to reach 2019’s peak of £13.67bn.
When it comes to the top gifts for Christmas 2021, the report predicts that shoppers will fork out the most on consumer electronics (£2.7bn), toys (£2.34bn) and clothing and footwear (£2.06bn).
Anita Naik, Lifestyle Editor at VoucherCodes comments, “Last year’s Christmas was unlike any other on record for both consumers and retailers alike as most of the UK were plunged into unexpected lockdowns for much of the festive period. As most Covid restrictions have now been lifted, and are expected to remain so throughout the Christmas period, it’s no surprise that the nation is gearing up for an extra special Christmas this year.
“Whilst the thought of a normal Christmas with loved ones is an exciting prospect, this Christmas it will be easier than ever to get caught up in the buzz which could lead to overstretching your festive budget as you prepare for the big day.
“To help you stay on track, check out our blog post on how to save money on Christmas.”
Christmas is a time of year when we want to spend money, on our loved ones, family and friends. If anything this year has shown us that spending time with one another is the most important gift of all. Do not get into lots of debt this Christmas, buying gifts and presents.
1. Work out your budget
Your circumstances might have changed this year, or you may have managed to save not commuting to work. Whatever your financial position, work out your budget for Christmas and then work backwards.
2. Calculate how much you have to spend
Now you have worked out your budget, allocate how much you can spend on family gifts for other people. You can suggest buying your extended family a Secret Santa gift, so you are only buying one which is a fun way of saving money. Start buying food for Christmas if you haven’t done it already!
3. Stick to your savings
I have various pots of money set aside in Monzo and Plum. This way I can keep this money separate and then only spend what is available. I use Monzo for my daily spending, which is really useful!