Spent £300 so far and the vast majority of that is on DS. We seriously scaled back on Christmas a few years ago and as a result enjoy it much more. This was due to clutter, mess, stress rather than money.
I've stopped exchanging gifts with friends at Christmas (but we make more of an effort with birthdays), and we don't buy for each others children either. No family adults apart from parents.
So we now only buy for DS, MIL, FIL, my dad and give a token gift to nieces and nephews (think small selection box +£10 - in contrast we spend £30+ on their birthdays). DH and I usually don't exchange gifts but I think we might start again next year.
In total we will probably spent about £500-600.
I think that is a reasonable amount to spend. We are pretty comfortable financially (we will simply save a bit less in Nov/Dec to pay for it rather than saving for it) but I don't think we have ever spent much more than that on Christmas. Only having one child helps a lot though!
I think as long as your friend isn't obligating people to spend more than they want to by reciprocating expensive gifts, and she can fully afford it, than each to their own. I would say your spending is more in-line with most families though.
I guess it also depends on how you think about things too...DH bought himself an ipad pro at the weekend - I think it was £700. I bought myself some make up and new clothes in the same trip (this was pretty unusual - we are generally fairly thrifty!). We could've swapped shopping bags, wrapped them up and gave them to each other for Christmas and added £850 to our Christmas budget and declared we exchange gifts (despite the joint bank account). I know MIL and FIL would've done that!
Likewise we gave FIL £350 for something he really wanted to do with one of his hobbies, but couldn't justify financially, a couple of months back. No way would be call something that expensive a Christmas present though or even a birthday present. It had to be a one off 'because we love you and knew you really, really want it!' gift.