Families to cut back on Christmas decorations as inflation hits budgets, Asda survey finds

The Leeds-based supermarket’s latest Mindset survey found that 92 per cent of shoppers plan to spend the same or more on their children this year despite having smaller budgets due to the cost of living crisis.

Families are also prioritising the traditional Christmas Day lunch, with 90 per cent saying they intended to maintain or increase spending.

However, families are planning to make cuts elsewhere to make their festive budgets stretch further with over half (54 per cent) planning to spend less on Christmas decorations.

Other saving opportunities include spending less on presents for extended family members and friends compared to previous years.

The drive to prioritise Christmas spending reflects the difficult financial position facing many families.

The latest Asda Income Tracker, which monitors household disposable income, shows the average UK household was £142 worse off compared to last October.

The fall in disposable income is primarily due to a steep rise in energy costs which have risen by almost 90 per cent year-on-year.

After paying tax and essential bills in October, the average household had £203 per week left – the lowest amount since August 2018.

Younger age-groups are particularly hard-hit by inflationary pressures.

While annual falls in disposable income were recorded amongst all age groups, the largest relative fall was seen amongst households under 30, amounting to a drop of 24.8 per cent.

The Asda report said: “This larger fall is predominantly due to their greater exposure to inflation, as a result of their spending structure.

"The most resilient households were those aged 50 to 64, though they still saw a discretionary income fall of 8.3 per cent in October.

"The stronger performance amongst these households reflects the fact that growth in the cost of their essentials was the slowest of all age demographics, as well as their relatively strong earnings growth.”