Retail sales will see a growth of less than 2% in December to reach £44.6 billion, according to new research from Mintel.
With numerous shops already entering into the festive spirit, many of Britain’s retailers are gearing up for their busiest season of the year.
However, consumer spending is set to tighten this year, against a backdrop of rising inflation.
The news comes as Mintel research reveals that many consumers believe that Christmas this year may be more costly than they’re used to.
As far back as January 2017, 43% of people who bought gifts last Christmas were already worried that the Brexit vote would mean that Christmas 2017 would be more expensive.
And Mintel’s Brexit-related research shows that concerns over the cost of living have only intensified since then.
Indeed, Mintel’s Consumer Confidence tracker highlights that financial concern has grown over the past year for many UK shoppers.
While in October 2016 34% said they felt financially confident that they’d be “OK” in the next year or so, this fell to 31% who said the same in September 2017.
Additionally, while in September 2017 28% of consumers said they were worse-off than they were a year ago, this up from 20% who said the same in October 2016.
Richard Perks, director of Retail Research at Mintel, said: “The natural response to falling real incomes would be to cut back on spending. Added to the tough comparison against last year’s boom, retail sales would be expected to be lower this Christmas. But we don’t feel that we can justify such a negative forecast.
“Retail sales are holding up exceptionally well, even if they are largely financed by increased borrowing. It seems too close to Christmas for there to be a significant fall in spending this year. We also believe that people may well feel that next year will be tough, so they will have a good time now before reality strikes,” he added.
“When it comes to individual spend, of those who bought gifts last Christmas, the average shopper forked out £367 on gifts, with 21% saying they spent more than they had the previous year.”