The report found that 15.8% of 10,000 shoppers surveyed said they were buying presents for their pets, compared to the 14.3% buying for grandparents.
Despite the tough economic climate, consumers are still predicted to spend £86 billion during the festive season, an increase of 1% from last year.
Tech-savvy shoppers are increasingly using their mobile devices and tablets to research and purchase gifts, and retailers offering in-store collection services will triumph over extreme weather conditions.
Tablets, including iPads and Kindles, will be popular presents as shoppers invest in expensive gifts. 'Chadlets', or tablets for children, are also expected set to top the wish lists of the younger generation.
However, consumers will buy fewer items overall.
Maureen Hinton, practice leader of UK retail at Verdict Research, said: "A tablet is quite an expensive gift to give. So people are going to cut back on other gifts and what we're seeing is people are spending more, but they're buying less.
"As their disposable income shrinks, shoppers are being very careful on what they spend their money on. So it does mean they're going to cut back on cheap toys and will look to fill the Christmas stocking elsewhere."
Shoppers will instead spend over £35 billion on festive food, as an estimated 225,000 diners will tuck into Heston Blumenthal's hidden clementine Christmas puddings, available at Waitrose.