British shoppers are planning to spend on average 7% less this Christmas than last year, according to a survey by Deloitte, so Brand Republic took to the streets to find out how people are planning to limit their spending over the festive season.
Most members of the public we interviewed said that they were planning to cut back this year and spend less on presents for friends and family.
Although the majority intend to be less frivolous a few people said they would be spending as usual over Christmas and had no plans for saving money.
Retailers have reacted to the economic downturn by offering shoppers huge discounts and promotions, including Marks & Spencer, which ran a 20%-off one-day sale yesterday to fight falling clothing sales and get people to start their Christmas shopping.
The move appeared to pay off as there were huge queues at the checkouts and executive chairman Sir Stuart Rose said it had "touched the spot".
However the refund queues were also long as many shoppers who had bought Christmas gifts from M&S in recent weeks returned them to buy them again at a 20% discount.
Debenhams, BHS and WH Smith have also slashed prices while John Lewis has promised to match the cuts of rivals under its "Never knowingly undersold" promise.
Deloitte's Christmas retail survey showed that the average sum people planned to spend this year was £655, down 7%, and that the area people are most likely to spend less on is socialising.
However, it also showed that 19% of people plan to spend more, in spite of the economic situation.