In the realm of material science, xenon trioxide (XeO3) is characterized by an significant degree of shock sensitivity, resembling characteristics associated with primary explosives. To determine the underlying principles and quantify such behaviour we present a comprehensive computational study addressing the structural, vibrational, electronic and optical behaviour of energetic XeO3 by employing DFT calculations (Density Functional Theory). Our study demonstrates a good agreement between our computed structural parameters at equilibrium and experimental findings, particularly after incorporating vdW (van der Waals) interactions. Also, the mechanical stability of XeO3 is assessed by computing the Cij (elastic constants) and the B (bulk modulus). The evaluation of elastic constants in various directions indicates that (C33 > C22 > C11) XeO3 is highly shock sensitive along crystallographic a-axis. The computed (B) bulk modulus is determined to be 12.98 GPa, aligning closely with the values observed in other primary explosives. The phonon dispersion spectra computed within the harmonic approximation confirms the dynamical stability of XeO3 in P212121 structure. The spectra also reveal a notable interaction between the acoustic and optical branch, resulting in low thermal conductivity which is a trait for the energetic materials. The precise measurement of the energy band gap is crucial for establishing potential correlations with the photodecomposition process of energetic materials. To support this, we have conducted band structure calculations using the TB-mBJ (Tran-Blaha modified Becke-Johnson) potential, alongside the conventional GGA/LDA methods, generally known to underestimate band gaps. Our TB-mBJ based calculations yielded an energy band gap around 2.5 eV, which can also be compared with other energetic compounds. The rapid fluctuations of the optical constants suggest photodecomposition nature of XeO3 in the near UV region. The insights gained from our study would be of high interest for the study of other xenon (Xe) compounds and their oxides, delivering direction for potential applications across diverse fields.