Some say they still plan on meeting up with family and friends, but others have chosen to keep among their household and not risk spreading Covid.
Shoppers and traders at Bilston Market, in Wolverhampton, said the loss of pubs has also played a part in disrupting festive plans.
Under Tier 3, pubs can only operate as takeaways, meaning people cannot meet with family and friends in their locals, losing out on a festive tradition.
Shantelle Davies, aged 28, from The Scotlands, in Wolverhampton, said: "We will be staying alone this Christmas. All year we have stuck together. I don't want to take any risks."
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Her father, David, 65, added: "We don't like mixing. We have a small, little family of four people.
"We don't trust the situation at the moment. We just stay on our basically. It is too much.
"It is not worth the risk. We don't believe everything the Government is saying. We are still not willing to take the risk.
"I think it has been over exaggerated, I really do. Ninety per cent of people have been saying that.
"But, again, even though you think that, you have to use common sense. I think people are scared.
"We will have a bigger celebration next year. It is a celebration this year that we have survived."
Steve Pearce, 54, from Coseley, who was out Christmas shopping with his daughter, Katie, 22, said: "Our Christmas plans have always been done small.
"We will spend it together as usual. We were supposed to be going to Butlin's, in Minehead, in the New Year, but that has been cancelled."
Mick Sykes, 55, from Bloxwich, who is the security supervisor at the market, said his family will have a scaled back Christmas celebration, although they were planning to go abroad.
He was also looking forward to meeting his friends in a pub on Christmas Eve, but Tier 3 has put a stop to that.
He said: "It will be hard this Christmas. The majority of people I am seeing are moaning about not going out for a meal.
"A lot of people have pub meals. You talk to a lot of these younger generation, in their 20s. In this game, you get to know a lot of people.
"They are going to ignore this Government stuff. I hear them talking. They are booking big private houses for parties.
"We will be sitting around the table, watching whatever nonsense they put on television this year.
"I rarely drink at home. I like to go on Christmas Day, early, have a few drinks with mates, come back home, have our dinner.
"I am missing I can't pop to the local. Me and the lads like to go on Boxing Day [to the pub] and watch the football."
However Andy Lycett, 63, from Cannock, says he is not put off by Covid from having a large family gathering.
Mr Lycett is a market trader and sells seasonal items. At the moment, his stall sells Christmas cards and calendars. He has worked on stalls since he was seven and ran his first one aged 14.
He said: "As market traders, we are very family orientated, so we are having a big Christmas dinner. I have just bought my Christmas turkey, which was £24, we are having a big family dinner.
"It is only three families, but we have got a big family, about 15 people we are having down for Christmas dinner, it will be very nice."