KPMG UK’s data indicates that 4/10 consumers plan to spend less this Christmas.
In fact, 45% of respondents said that they had kept their Christmas budget the same this year.
Only 4% of consumers surveyed indicated that they will be spending more on Christmas gifts.
Most of those who said they would have to reduce their budget for gifts were between 35 and 44 years old.
Most people aged 65 years and older said that they were not able to afford to buy gifts.
Linda Ellett, UK head of Consumer Markets, Retail and Leisure for KPMG, said: “Unsurprisingly, the higher cost of living looks set to take its toll on Christmas spending for many households. Four out of ten consumers said that they would cut back on their Christmas gift budget this year. A third also said that they would spend less money on groceries, and eat and drink less at festive restaurants.
“The largest percentages of people said that their spending will remain the same this year, but only small amounts of households said that they were in the position to spend more this Christmas. Even for those spending the same – the volumes that they receive may well be less due to inflation.”
She added: “The upshot of this for retailers is continued competition for shrinking consumer spend and reduced volume and a need to capture audiences via strong campaigns, well targeted promotions and discounting and great customer experience.
“Older consumers told us that they were least likely to have to cut their gift buying budgets – so focus on that group and the presents for kids and grandchildren may be key. Retailers will of course also know that getting people of all ages spending early on Christmas gifts can often mean they end up spending more overall due to the likes of late impulse purchases.”