UK retail spending is forecast to rise 4.5% year on year over the 2026 holiday season, placing the UK joint highest in Europe alongside Czechia, according to the Mastercard Economics Institute.
The institute’s annual holiday forecast, based on Mastercard SpendingPulse insights covering in-store and online spending across all forms of payment, projects retail sales excluding automobiles and fuel across nine European markets to rise 3.4% between 1 November and 26 December. In the UK, online spending is expected to grow 9.3%, more than twice the rate of total retail sales.
Forecast growth for the season, total retail and e-commerce, compared with the same period in 2025:
- UK: 4.5% total, 9.3% e-commerce
- Czechia: 4.5% total, 9.8% e-commerce
- Spain: 4.0% total, 11.2% e-commerce
- Hungary: 4.0% total, 10.1% e-commerce
- Poland: 4.0% total, 10.9% e-commerce
- France: 3.1% total, 5.0% e-commerce
- Netherlands: 3.0% total, 4.9% e-commerce
- Italy: 2.9% total, 7.5% e-commerce
- Germany: 2.5% total, 4.7% e-commerce
The figures are not adjusted for inflation. The institute points to a relatively solid economic backdrop, with labour markets across much of Europe remaining robust and unemployment close to historic lows. However, higher natural gas prices since the summer are expected to push up energy costs during the holiday season, adding to pressure from higher fuel prices, and price pressures are likely to broaden to goods, services and food, reinforcing consumers’ focus on value.
Shopping later into the night
Physical stores remain central to holiday shopping, particularly in the final days before Christmas for categories such as toys, jewellery and cosmetics, but e-commerce continues to drive the strongest growth, with activity peaking around Black Friday and Cyber Monday. Premium fashion, beauty, sporting goods and electronics typically see the largest online uplift.
Late-night shopping is also becoming more common. In the UK, the share of online spending taking place after 8pm rose from 12% in 2019 to 15% in January to September 2025, and climbs to 17% during the holiday season. In Spain, nearly a quarter of online holiday spending happens after 8pm.
AI subscribers shop differently
The institute compared purchasing patterns among AI subscribers and non-subscribers across Black Friday weekend, including Cyber Monday, and the final days before Christmas, from 20 to 25 December. AI subscribers concentrate more of their lifestyle holiday spending, on fashion, beauty and home furnishings, in the Black Friday period, while non-subscribers are more likely to focus on discounted electronics. In Spain, 15% of holiday electronics spending by non-AI subscribers takes place between Black Friday and Cyber Monday, compared with 12% among AI subscribers.
AI subscribers are also more likely to shop at the last minute, doing a larger share of their in-store spending across major gifting categories in the final days, with jewellery a popular late purchase in Czechia, Italy and the UK.
Small businesses and office parties
Small high-street businesses are expected to benefit from spending on experiences, services and personal touches that are difficult to replicate online. The strongest seasonal gains in share of in-person spending come from travel agencies in the UK (up 4 percentage points), live performances in Italy and Poland (5 points), arts and crafts stores in Spain (4 points), florists in Czechia (4 points) and independent cinemas in France (3 points).
Business spending also peaks in the final quarter, when nearly a third of annual restaurant spending by small and large businesses in Europe takes place, along with nearly a third of small businesses’ yearly electronics and appliance spending. In the UK, the average holiday-season restaurant transaction on a small business card is twice the value of a consumer transaction, while transactions on large corporate cards are around five times larger.
“The 2026 holiday season reflects a European consumer who is both resilient and increasingly digital. Shoppers are embracing greater flexibility, purchasing online at all hours and turning to AI to help navigate holiday purchases. At the same time, spending on experiences, travel and at local businesses highlights consumers’ continued desire to celebrate, connect and create meaningful moments during the holiday period.”
Natalia Lechmanova, Chief Economist Europe, Mastercard Economics Institute
For winter travel, Asian destinations show the strongest growth in popularity among European travellers for November and December 2026, based on year-on-year increases in booking shares, led by Phuket, with Tokyo and Bangkok also recording significant gains. Closer to home, city breaks in Poland, Italy and Bratislava are attracting growing interest, while Montreal and Toronto rank among the fastest-growing long-haul destinations. More detail on the institute’s research is available from the Mastercard Economics Institute.
Terry Clark is the Publisher and Content Director of 365 Retail, with more than a decade of experience covering retail design, technology innovations, store openings and the wider retail industry. He also works closely with leading retailers, suppliers, agencies, events and industry awards across the UK.
