Highlights
- Only 26 per cent of shoppers planning to take part in Boxing Day sales, down from 28 per cent in 2024.
- Nearly 70 per cent of consumers blame cost pressures for reduced spending, up from less than half last year.
- UK retail sector has lost 74,000 jobs in past year amid rising business costs and regulatory pressures.
British shoppers are expected to shun Boxing Day sales this year as chancellor Rachel Reeves's tax increases dampen consumer confidence and spending power.
Festive sales spending is forecast to decline by £1bn to £3.6bn in 2025, according to research by Barclays. The drop represents a significant blow to high street retailers who depend heavily on the "golden quarter" sales period to boost annual revenues.
The decline is driven by falling consumer appetite, with only 26 per cent of shoppers planning to participate in Boxing Day sales compared with 28 per cent last year. However, those who do intend to shop will spend more, with average expenditure forecast at £253 per person an increase of £17 from 2024.
Household budgets continue to face considerable strain, with almost 70 per cent of consumers citing cost pressures as the reason for reduced spending.
This marks a substantial increase from less than half reporting such concerns a year ago. Barclays' survey revealed that a quarter of Boxing Day shoppers will only purchase items they consider essential.
Retail sector strain
Chancellor's recent Budget announced a freeze on income tax thresholds that will push millions into paying higher rates, alongside increased taxes on property and savings. Consumer confidence fell to -19 just ahead of the Budget, according to GfK's long-running survey.
Separate Barclays data showed households reduced spending at the fastest pace since the pandemic last month, despite heavy discounting during Black Friday sales.
Karen Johnson, head of retail at Barclays, told The Telegraph "Shoppers have demonstrated just how cost-conscious they are throughout 2025, and we expect that we'll see this play out during the Boxing Day sales.
Boxing Day is still a pivotal moment for retailers, fuelled by Christmas nostalgia, but it has evolved to reflect modern consumer demands."
Retailers themselves face mounting pressures from recent Budget measures. Increases in the minimum wage and employers' National Insurance contributions have disproportionately affected the retail sector, which relies heavily on lower-paid workers.
Labour's upcoming Employment Rights Bill, targeting zero hours contracts, will further increase regulatory burdens.
Office for National Statistics figures show UK retail employment stood at 2.8 m in September, down 74,000 from the previous year and 355,000 fewer than in 2015, highlighting the sector's ongoing challenges.
