In an interview with NPO Radio 2 in October 2021, Sheeran revealed that John asked him to do a song with him the previous year after the success of "Step into Christmas".

[5] The official music video for "Merry Christmas" was premiered to Sheeran's YouTube channel alongside its release on 3 December 2021.

[6][7][8] Several people made a cameo in the video including Jonathan Ross, Michael McIntyre, Big Narstie, Mr. Blobby and the Darkness.

"Merry Christmas" was one of five hits Sheeran was credited on that week, as the Official Charts Company added Sheeran to the credit of Fireboy DML's single "Peru"[10][11] when the remix debuted in the Top 40, one position higher than LadBaby's single, at number 28.

On 7 January 2022, "Merry Christmas" became the first record with Standard Chart Ratio (SCR) streaming status to completely drop out of the Top 100 from number one, exiting at the same time as "Sausage Rolls For Everyone".

If "Merry Christmas" had not been excluded from the Top 40 because of the primary artist rule, the record would have been around number 38 after amassing 8,271 sales that week.