LONDON — The traditional post-Christmas shopping frenzy is expected to face a significant chill this year, with new forecasts predicting a £1 billion drop in Boxing Day spending. As British households grapple with the fallout of recent tax rises and persistent cost-of-living pressures, the high street is bracing for what experts call a “pivotal moment” that could determine the survival of many struggling retailers.
According to latest data from Barclays, total expenditure for the Boxing Day sales period is projected to fall to £3.6 billion, down from £4.6 billion in 2024. The decline reflects a darkening mood among consumers, with only 26% of shoppers planning to participate in the sales this year, a decrease from 28% last year.
A “Golden Quarter” Under Pressure
The “Golden Quarter”—the final three months of the year—is typically when retailers generate the bulk of their annual profit. However, 2025 has proven to be a year of relentless headwinds for the sector.
- Tax Raid Impact: Chancellor Rachel Reeves’s recent Budget, which included a freeze on income tax thresholds and higher taxes on property and savings, has been cited as a primary driver of falling consumer confidence.
- Cost-Conscious Consumers: Nearly 70% of shoppers surveyed blamed lower spending on cost pressures, a sharp rise from less than 50% who felt the same way a year ago.
- Focus on Essentials: A quarter of those who do plan to shop today say they will strictly limit their purchases to essential items rather than luxury or “treat” goods.
“Shoppers have demonstrated just how cost-conscious they are throughout 2025,” said Karen Johnson, Head of Retail at Barclays. “While Boxing Day is still a pivotal moment fuelled by Christmas nostalgia, it has evolved to reflect modern, leaner consumer demands.”
The “Squeeze” on the High Street
It is not just the shoppers who are feeling the pinch. Retailers themselves are being squeezed by a “perfect storm” of rising overheads. The Chancellor’s decision to increase the minimum wage and hike employers’ National Insurance contributions has hit the retail sector disproportionately, given its heavy reliance on lower-paid and part-time workers.
Furthermore, the government’s upcoming Employment Rights Bill, which aims to crack down on zero-hours contracts, has sparked concern among industry leaders. Many argue the added red tape will hamper the sector’s ability to offer the flexible, seasonal roles that have long been the backbone of high street staffing.
“Retail jobs are falling by the wayside,” warned the British Retail Consortium (BRC). “As costs mount on the industry, it is working people who will pay the price as local, flexible jobs are lost.”
Shrinking Workforce, Growing Digital Divide
The structural shift in the UK economy is becoming increasingly visible in official statistics. Data from the Office for National Statistics (ONS) reveals that there were 2.8 million retail jobs in the UK this September—a drop of 74,000 in just one year. Since 2015, the sector has seen a staggering loss of 355,000 positions.
While footfall on the high street continues to dwindle, a new trend is emerging among those who remain: AI-assisted shopping. Roughly 37% of online shoppers—and over half of those aged 18-34—now use artificial intelligence tools to hunt for the best deals and compare prices, turning the Boxing Day hunt into a digital-first competition.
| Key Metric | 2024 (Actual) | 2025 (Forecast) |
| Total Boxing Day Spend | £4.6 Billion | £3.6 Billion |
| Shopper Participation | 28% | 26% |
| Avg. Spend per Person | £236 | £253 |
| Retail Job Count (Sept) | 2.87 Million | 2.80 Million |
A Silver Lining for Bargain Hunters?
In a curious twist, while fewer people are shopping, those who do venture out are expected to spend more individually. The average outlay is forecast at £253 per person, up £17 from last year. This suggests that “intentional shoppers” have been holding back their budgets specifically for the deep discounts offered during the clearance period.