Wham! had been a dominant force on the UK singles chart in 1984 and news that they were planning a Christmas single meant that a battle for the coveted Christmas #1 spot in the UK seemed set to be between Wham! and the year's other big act, Frankie Goes to Hollywood, who had achieved a third #1 in early December with "The Power of Love."
The Band Aid project helmed by Bob Geldof, however, produced the #1 single. Wham!'s offering peaked at #2 for much of the period, although George's involvement in Band Aid meant that Wham! still had an input. Wham! subsequently topped the monies raised by Band Aid by donating all of their "Last Christmas/Everything She Wants" royalties to the Ethiopian famine appeal.
The video for "Last Christmas" shows George and partner Andrew Ridgeley accompanying girlfriends to see friends at an unspecified ski resort — although the cable car that can be seen in two shots is from Saas-Fee, Switzerland. It becomes clear early on that the character of Andrew's girlfriend had previously been in a relationship with George, and that the song is aimed at her. The video also featured the duo's erstwhile backing singers Pepsi and Shirlie and Spandau Ballet bassist Martin Kemp, the boyfriend and future husband of Shirlie Holliman.