- New Mastercard SpendingPulse data predicts a 3.7% increase in physical retail sales compared to the same period in 2022 as consumers return to bricks and mortar stores in the run up to Christmas.
- Data points to cautious optimism among UK consumers this holiday season as people get together during the festive period, with restaurant spending set to increase by 12.9% year on year.
- Spend on clothing and jewellery to see a surge, up 5.3% and 5.1% respectively.
London, UK: There will be a return to bricks and mortar retail this festive season as people head to the high street to do their Christmas shopping, according to new data from Mastercard SpendingPulse.
The forecast predicts a 3.7% increase year on year for instore shopping, as well as a 12.9% increase on spending in restaurants, as people come together to celebrate with friends and family during the festive period between 1st November and 24th December.
Key trends to watch out for in 2023 festive spending:
- A return to bricks and mortar stores. As the pandemic reshaped consumer behaviours towards online shopping, this year’s consumers are taking a hybrid approach, blending brick-and-mortar stores and online. The forecasts suggest many are returning to the High Street this holiday season with instore sales expected to grow by 3.7% year on year.
- Restaurant spending is up. Building on the ongoing demand for in-person experiences and an eagerness to socialise this festive season, spending in the UK restaurant sector is expected to increase by 12.9% when compared to 2022. This trend will be echoed across Europe*, with overall spending set to increase by 14.4% year on year across the market more broadly.
- Dressing to impress. Spending on clothes and jewellery will increase as people dress to impress for the festive period. Analysis of areas of anticipated spending surges show that fashion and accessories-related sectors are both expected to grow this year, by 5.3% and 5.1% respectively when compared to the same period last year.
- The big Christmas shop. Spending on essentials, such as groceries, is expected to increase by 4.3% year on year, primarily driven by inflation, but also by the desire from shoppers to consume festive foods and host social gatherings.
- Demand for digital. When it comes to gifting, electronic sales are anticipated to be favoured this year, with sales predicted to grow by 5.6% year on year.
Natalia Lechmanova, senior economist, Europe at Mastercard Economics Institute: “Our latest Spending Pulse forecasts show cautious optimism among UK consumers, many of whom will remain cost-conscious this festive season as navigating inflation, higher mortgage payments, and an uncertain economic environment. The good news for UK retailers and the hospitality sector is that there is a continued desire to spend, particularly on gifts and dining out.”
The predicted increase in retail spending should provide some comfort to UK small business owners, particularly those with bricks and mortar stores. Recent research from Mastercard’s Strive UK small business barometer found that around a third (32%) of micro and small business owners were feeling less confident than last year about their business’ performance in the run-up to the Christmas period, but today’s data suggests the outlook is promising.
Anticipated UK Holiday Retail Sales
November 1 – December 24, 2023 vs. 2022
Source: Mastercard SpendingPulse, which measures overall retail sales
across all payment types, including cash and cheque.
Notes to editors
*Mastercard SpendingPulse looks at nine European markets, including: the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Spain, and United Kingdom. Mastercard SpendingPulse reflects nominal spending and is not adjusted for inflation