Harvey John
Unit 2 Ferry Wharf
Hove Enterprise Centre
Basin Road North
Portslade, East Sussex
BN41 1BD
17th December 2025
A couple of years ago, our Principal Advisor Guy Middleton wrote about the Economic Impact of Christmas and explored how festive spending shapes the wider economy.
With consumer behaviour and economic conditions shifting since then, we’ve revisited the topic using the latest insights to show how Christmas spending has evolved.
Despite its various religious roots, cultural, religious, and commercial influences have shaped Christmas into a commercial spectacle over the centuries. Today, Christmas faces criticism for excessive commercialisation, with concerns about consumerism overshadowing its original religious and cultural significance.
So what is the true economic impact of Christmas? How did it become so expensive, and where does our money go?
A commercial Christmas
Many contemporary Christmas traditions find roots in Germanic, Scandinavian paganism, and Norse folklore, later adopted by Christianity and commercialised during industrialisation and the rise of capitalism.
The 19th-century surge in consumerism saw mass production, advertising, and the emergence of Santa Claus shaping Christmas into a season of material abundance. Technological advancements, media, and popular culture further propelled overindulgence, defining the commercial aspects of 21st-century festivities.
Today, the economic impact of Christmas is huge, as it’s a global holiday celebrated by almost every country around the world between December 21st and January 7th.
Make it rein
It should come as no surprise that Christmas is the most expensive holiday of the year, closely followed by Mother’s Day and Valentine’s Day.
When looking at the cost of Christmas per country, Canada topped the bill in 2022, spending an average of £1,415 per household, with 55% going towards Christmas gifts. Germany, Australia, and the USA followed, while the UK ranked 7th with an average spend of £859, with 70% dedicated to presents and 12% on food.
Gift-giving takes centre stage during Christmas and has done so for some time. Despite inflation pressures and the threat of tax increases keeping shoppers selective with their spending, the UK’s enthusiasm for Christmas endures, with many still willing to invest in having a good time.
According to GlobalData, the UK is projected to reach a total retail expenditure of £91.12 billion this Christmas. Food and drink still constitute a significant portion, with the cost of an average Christmas dinner surging 6.5% from last year.
The average expenditure per capita is expected to increase from £513 in 2019 to £802 this year. Regional variations indicate Londoners may spend up to £973 per person across the holiday season, although an estimated 60% of people are planning on cutting back this Christmas.
Is Christmas good for the economy?
The notion that Christmas helps prop up the economy, creates jobs, and perpetuates the financial stability of our economy is challenged by David Kyle Johnson, writer of “The Myths that Stole Christmas.” He argues that a healthy economy generates Christmas spending, not the other way around. Economist Joel Waldfogel claims that gift-giving is inefficient, citing the deadweight loss of Christmas, but others argue that the joy derived from gift-giving and sentimental value cannot be monetarily quantified.
The positive economic impact of Christmas is equally stated, with arguments made that increased production, discounted shopping days, and temporary job opportunities all lend to economic uplift. Festive spending is expected to hit highs of £24.6 billion this Christmas, with record-breaking spending predicted, driven in part by inflation. Credit card spending has, conversely, decreased; one in ten people are relying on borrowing or credit cards, compared to one in four in 2023.
Predictions of Christmas 2025 spending are varied, with some anticipating increased spending and others noting the lipstick effect, where people choose more affordable treats during economic hardship. The real impact will only become clear in hindsight.
Worried about Christmas spending?
A third of UK residents (33%) say they feel at least somewhat concerned about how Christmas affects their finances.
Even with rising costs, Christmas can still be a positive force for households and businesses. Thoughtful spending and strategic choices can reduce stress while supporting jobs and boosting revenue. Having the confidence to make considered decisions, whether saying no to unnecessary obligations or choosing where to spend, helps both wellbeing and financial outcomes.
Christmas is multifaceted…
…it creates economic value as well as opportunities for connection.
Even amidst rising costs, Christmas continues to support jobs, boost business revenue, and provide opportunities for celebration and connection, proving that the holiday season can be successful in terms of boosting joy and the economy.
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Chloë's responsibilities encompass candidate sourcing, market research, trend analysis, and content development, all of which contribute toward elevating Harvey John's dedicated legal recruitment division and enhancing its sincere reputation for achieving success through clarity and expertise.
