Brits expected to go on a record spending spree this Christmas

“Tis the season to be jolly! Everyone is expected to be in a festive mood as banks, lenders and retailers predict Brits to spend a record on shopping this Christmas.

Barclays predicted that early estimates put the figures on shopping spent on debit cards to reach £23 billion throughout December – a four percent increase on the same time last year. Supermarkets will pocket £5 billion in their busiest month of the year whilst over £1 billion will be spent at petrol stations, fuelling the great Christmas getaway.

Retailers too are overwhelming convinced that this Christmas will be no worse than last year. At least 42 percent of retailers polled by the British Retail Consortium’s (BRC’s) Christmas Trading Snapshot Survey, said this Christmas will be better than last year’s. The other 58 percent said sales would be the same as 2008 while none of the respondents thought sales will be worse.

A slight majority, or 53 percent or retailers said they believe December’s sales will be boosted by customers bringing their purchases forward to beat January’s VAT increase, particularly with so many special offers available at the moment. But nearly half of retailers said sales in the New Year will be harmed by the increase in the VAT rate to 17.5 percent, which the Chancellor has confirmed for 1 January.

Stephen Robertson, British Retail Consortium Director General, said: “There’s some good news here but we’re not out of trouble yet. I’m reassured that retailers are more confident about their prospects this Christmas but remember the comparison is with dramatic sales falls last year. There are more customers willing and able to spend now but, for many retailers, it’s taking even more discounts to persuade them to buy.”

According to Barclays, shoppers are expected to shun the economic downturn in favour of festive cheer this December with record amounts set to be spent on the UK’s high streets.

The extra bank holiday over the Christmas weekend is likely to see high streets and shopping centres across the UK heaving with shoppers eager to make the most of the annual sales and snap up a bargain. Department stores will attract £650 million of debit card spending over December whilst jewellers’ tills will be ringing to the tune of £210 million. Not surprisingly with Christmas being the time to be merry, restaurants and pubs will have their busiest time of the year with debit cards settling £600 million of bills whilst £75 million will be spent in off-licences.

An equally staggering £17.8 billion of cash will be withdrawn from ATMs and banks throughout December. The busiest day for ATMs is expected to be Friday 18th December as the festive party season gets in full swing and the high street buzzes with last minute Christmas shoppers. Peak time for ATM withdrawals is likely to be 12pm to 1pm lunchtime, when over £24,000 will be withdrawn every second.

Brian Cunnington, head of debit cards for Barclays, comments: “We all know Christmas is the season of goodwill but that usually means it’s the season for spending as well. With so much shopping and entertaining to be done debit cards are set to be well used throughout the month. Nearly all shops, restaurants, bars and online companies accept debit cards so it is the easiest way to get your Christmas spending done quickly and securely. We would remind customers to be careful to take care of their card and their PIN, especially when using their PIN in crowded places.”