We're still big Christmas spenders despite the cuts
Consumers will further cut their Christmas spending this year, but will still fork out more than shoppers in the rest of Europe.
The downturn means that consumers here are set to spend less on gifts, buy smaller amounts of food and cut back on socialising.
Overall spending is set to fall by 10pc this year, a survey by consultancy firm Deloitte shows.
However, despite the severe cutbacks we still plan to spend more in December than our European counterparts.
Ireland is in second place in the European spending table behind Luxembourg.
The average family intends to spend €1,020 on the festivities, down from €1,431 in 2007, and discounted products and retailers' own brand items have come back into vogue.
Families have shaved €411 off the Christmas spending binge in the last three years by cutting back on gifts and the spending on food. In the last two years alone spending on Christmas has fallen by a third.
This year households intend to shell out €650 on gifts, with another €250 spent on food.
Socialising will eat up €120 this year, well down from the amount spent in previous years.
All of this will mean the jingle of retailers' tills will not be so noisy this year.
Susan Birrell a partner at Deloitte, said Irish consumers were becoming increasingly prudent in their spending patterns.
"With what promises to be a very tough Budget looming in December, Irish consumers are likely to become more cautious in their spending during the festive season."
Most people said they planned to spend less because of the economic downturn and a belief that it will get worse, but four out of 10 have reduced spending because they are in debt.
The majority of respondents to the survey indicated that they aim to buy discount or retailers' own label products and purchase few branded products.
The way in which Irish consumers will finance their Christmas purchases has also changed with almost half saying they they will pay with cash, while around a third indicated that they were saving more.
But consumers have no plans to buy second-hand products this year as Christmas presents. This trend runs contrary to other European countries.
Gift vouchers have now become the most wished for present, highlighting how consumers now wish to receive gifts with a high utility value.
This is followed by books, and then clothes or shoes. Cash, cosmetics and food or drink also figure prominently as wished-for gifts for adults.
When purchasing gifts for the under-12s this year, educational games were the most favoured option, followed closely by books.
This is in line with the rest of Europe as educational games were the top-ranked present in almost all European countries.
Only 28pc of respondents in Ireland indicated that they would buy video games for children this Christmas.