The Centre for Economics and Business Research (CEBR) estimates that employers will spend about £600m on Christmas parties for their staff this year, down from close to £1bn in 2007 and down 30 per cent on 2008.
Some City companies including Goldman Sachs, Morgan Stanley and national broadcaster the BBC have ditched their parties altogether while a two per cent drop in employment across the country has reduced the number of people who are available to go to the parties, the CEBR said.
Most of the pain is being felt by the party organisers, who have been forced to cut their prices by nearly 30 per cent to pull in customers.
As a result, for those companies that have opted to have a party, lower costs and lower numbers have accounted for the entire drop in spending. In other words, for those having a party the volume of spend per head is unaffected.
“So the revellers should expect to have had just as good a time as they had last year or the year before,” said Douglas Williams, chief executive of CEBR. “So don’t be surprised to see nearly as many people looking lively this year, despite the recession. Next year may be less good as we think that the economy could well get tougher in the new year, with higher VAT and very little uplift in salaries putting the squeeze on disposable income,” he added.