Christmas is one of the largest holidays on Earth, if not the largest. Although many religions, such as Judaism, observe other traditions, such as Hanukah, it has become increasingly common for families to partake in multiple celebrations. Interestingly, the rise in popularity of Christmas is less about its original Christian significance – namely to remember the birth of Jesus Christ – and more about its unique way of gift-giving and festive cheer. Cleverly, certain individuals have taken notice of the huge rise in celebration and have managed to make a pretty penny. With the Christmas of 2024 just past, I thought it would be fitting to uncover why this tradition of giving arose and just how much money is earned by companies during the Christmas season.

History of Christmas:

Without lingering too long, here is a brief history of Christmas. The rise of Christmas can be traced back to two key Christian events; the giving of gold, frankincense, and myrrh to baby Jesus in Jerusalem; and Saint Nicholas, a 4th-century bishop who was known for his generosity and devotion to helping those in need. Over the centuries, festive traditions and Christian recognition grew the holiday’s prominence, but a pivotal 20th-century development modernized it, bringing it to its present glory: commercialization. Coca-Cola’s ads in the 1930s revolutionized the image of Santa Claus which soon resulted in cooperations promoting Christmas as a shopping season. Fast-forward to the start of 2025, and an estimated 1.2 trillion dollars were spent during Christmas on the internet alone – a testament to the holiday’s evolving significance.

People are feeling increasingly generous, leading to a substantial rise in the demand for Christmas gifts. This is a very profitable business for companies; the question is, how much?

Groceries and shopping:

In modern Christmas tradition, it is safe to say that the presents are by far the most expensive part of celebrations: According to Gallup, the average US family spent over $1000 on presents this Christmas, a 4% increase from last year’s $975. This ever-increasing number is mainly a result of the increased commercialisation of Christmas through advertisements and social norms (as families buy presents, they always seek to outdo themselves the next year). This trend is certainly reflected in the profits made by companies, with Amazon earning a reported $170 billion in Q4 of 2023 (October 1st – December 31st), a 14% increase from Q4 2022.

While presents are typically the largest expense for families, Christmas breakfasts, lunches, and dinners also play a crucial part in Christmas. Research conducted by the NHS aligns with this statement as it concludes that an increased appetite is prevalent throughout the winter due to cold weather and holiday feasts. Retailers don’t just rely on holiday cheer to boost sales—they use strategic “nudging” techniques. From early Black Friday promotions to limited-time offers, the shopping season is designed to create urgency and tap into the psychology of gift-giving, encouraging consumers to spend more. It therefore comes as no surprise that companies such as Tesco and Ocado saw a maximum of 9.6% increase in sales during the festive season of 2024. To put that into perspective – that meant that due to the Christmas season – Tesco earned an additional £600 million in revenue. This year has also been monumental for Aldi, Lidl, and Sainsbury’s, as they recorded their best-ever Christmas sales to date. 

Film and Music Industry:

Demand for Christmas-themed songs has massively boomed over the last few years. Additionally, people are seeking nostalgia from Christmas songs that were released in the previous decades with a 74% increase from 2017 to 2018 which has resulted in over $177 million in revenue in the United States alone. Most of us will be familiar with the most famous songs, such as “Merry Xmas Everybody”, “Last Christmas”, and “All I Want For Christmas Is You”, and their miraculous defrosting towards the start of Christmas and probably wonder, are these songs enough to sustain the lavish lifestyle that their singers have? The answer is most definitely yes: Slade’s “Merry Christmas Everybody” earns a reported $1 million in royalties a year, Wham’s “Last Christmas” earns around $500,000 a year, and Mariah Carey’s “All I Want For Christmas Is you” earns a whopping $3 million annually.

Christmas songs are not the only form of entertainment that profits greatly from Christmas. Film industries have amassed a large number of streams from holiday-themed movies in 2023, resulting in 132 million dollars in revenues, with the most-watched movie being “National Lampoon’s Christmas Vacation” (watched by 9.4 million households). 

Christmas Trees:

The pinnacle of the Christmas experience takes place on either the evening of the 24th of December or the morning of the 25th when families come together to open presents. These moments are often portrayed in movies with grand Christmas trees upon which a constellation of shiny ornaments hangs. However, if we are to look at this moment in the shoes of an ‘undercover economist’ as Tim Harford would, we could see a plethora of opportunities to make money: The current Christmas tree market is valued at approximately $7 billion (2023) and is expected to grow to $9 billion by 2032. Interestingly, we are currently seeing huge growth in the artificial Christmas tree industry, which is already estimated between $1-2 billion; Even though we are seeing a large increase in demand for artificial trees, the demand for real trees is still rising. Ornaments are also a crucial part of the Christmas tree, with its market being almost as large as that of the Christmas tree, resting at a market value of $5.33 billion in 2024. Its market value is predicted to grow to $8.12 billion by 2032 – close to that of the Christmas trees.

Crypto Currencies:

Although cryptocurrencies have no direct connection to the celebration of Christmas, it is interesting to note the volatile ‘meme-coins’ that have been created around the theme of this holiday. SANTA, probably the largest Christmas-themed ‘meme-coin’ saw a significant surge in prices up to 650% in the early days leading up to Christmas (reaching a market cap of $620,000). However, the coin soon fell below its original listing price and is now valued at a $210,000 market cap. Another crypto coin that saw an even greater fall was RIZZAMAS, which had a maximum market cap of $83 million on the 28th of November but soon fell to a steadily declining $800,000.

Conclusion: 

The commercialization of Christmas has transformed it into a ginormous economic engine, producing billions of dollars in revenue across many industries. From grocery shopping to cryptocurrencies, the season’s economic impact is indisputable. As the holiday continues to grow in popularity, its economic significance will likely grow, fortifying Christmas as not just a time for celebration but also a key driver of global commerce.