It said this would create a “more polarised festive basket”, leaving grocery retailers facing modest value growth but largely flat volumes, according to IGD research.

More than half (51%) of shoppers say they plan to buy more premium own-label products, highlighting how consumers are increasingly seeking affordable indulgence despite ongoing pressure on household budgets.

Despite shopper confidence falling to -3 in September, Christmas spending is expected to remain resilient. Rather than cutting back across the board, IGD said it expects shoppers to make deliberate trade-offs, seeking savings on commodity categories before reinvesting in centrepieces, desserts and party food, and said this would create opportunities for both discounters and premium own-label ranges.

Jon Wright, head of insight at IGD, stated: “Shoppers still want to create memorable festive occasions, but they’re becoming increasingly strategic about where they save and where they spend. The retailers that perform best will help shoppers make those trade-offs, combining strong value credentials with compelling opportunities to trade up.”

Shoppers to choose at-home meal solutions

IGD also expects more festive spending to shift into the home as consumers look to reduce spending on restaurants, pubs and takeaways.

Rather than cancelling celebrations, many shoppers are expected to recreate them at home through premium meal solutions, party food and drinks, said IGD, which is likely to create further opportunities for grocery retailers while increasing competitive pressure on parts of the hospitality sector.

IGD highlighted that promotions, loyalty schemes and early festive purchases would play a “major role” at Christmas, with promotions accounting for 33.3% of December 2025 sales, which was the highest level since Christmas 2019.

Combined with growing demand for premium private-label products and at-home entertaining, pressure on household budgets could encourage shoppers to spread the cost of Christmas over a longer period, IGD claimed, bringing festive spending forward and creating more uneven demand patterns across categories and channels. It said retailers and suppliers would need to remain agile, ensuring strong availability across both value and premium festive lines while responding quickly to shifts in demand.