We are in Langkawi for Christmas Day.
Will shop/restaurants & bars be open or do they shut down?
Everything will be open.
December is peak season and there is a lot of tourists everywhere but Christmas Day is not busier than any other day around Xmas. Traffic is seldom "heavy" in Langkawi except for the strip between Pelangi and Underwater World in the evening and that is because people park without thinking that they are blocking the road.