
The Christmas ‘golden quarter’ of 2024 has not provided the anticipated boost for UK retailers, as consumer confidence remains low according to the British Retail Consortium-KPMG Retail Sales Monitor.
The data showed that sales increased by only 0.4% in the three months leading to December compared to the previous year. December’s sales, including Black Friday, saw a 3.2% year-on-year rise, but food sales grew by just 1.7%, significantly lower than the previous year’s 6.3% growth. Looking ahead, sales growth is projected to average 1.2% in 2025, which is below the expected shop price inflation of 1.8%, indicating potential volume declines. Retailers may respond by increasing prices and reducing investments.
Helen Dickinson, Chief Executive at the British Retail Consortium, said “Following a challenging year marked by weak consumer confidence and difficult economic conditions, the crucial ‘golden quarter’ failed to give 2024 the send-off retailers were hoping for. Non-food was particularly hard-hit, with sales contracting from the previous year. Food sales fared better over the Christmas period, ticking up slightly from the previous year, meanwhile beauty products, jewellery and electricals made a strong showing under the tree this year.
“While we project sales growth to average 1.2% in 2025, this is below the projected shop price inflation of 1.8%. This means volumes are likely to fall this year, all while the regulatory and tax burden on retailers will increase costs by £7bn from rising National Insurance Contributions, increasing national living wage, confirmed in the Budget, and new packaging levies. With little hope of covering these costs through higher sales, retailers will likely push up prices and cut investment in stores and jobs, harming our high streets and the communities that rely on them. Government must find ways to mitigate this, so that retailers can invest more in growth and jobs, starting with its planned business rates reform where it must ensure that no shop ends up paying higher rates than they do already.”
Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, said “With Black Friday falling as late as it did, this year it was part of the Christmas shopping season even more so than in previous years.
“December, coupled with Black Friday week at the end of November, delivered welcome sales growth for retailers. Computing and mobile phones, and beauty products, particularly saw sizeable jumps in sales both in-store and online, with the likes of AI-enabled tech and beauty advent calendars boosting festive takings.
However, sales growth during the golden quarter of October to December was minimal, reflecting the ongoing careful management of many household budgets during a time when many costs remain at a heightened level compared to past years.
“In 2025, we will see retailers increasingly utilising customer data and AI technology to deliver increased personalisation when it comes to targeting products and offers to their current, and potential, customers.”
Food & Drink sector performance | Sarah Bradbury, CEO, IGD, said “Early results for Christmas trading show some positive signs with both grocery sales and volumes up compared to last December, although the rate of growth has slowed compared to 2023. The festive season usually leads to a lift in shopper confidence; December 2024 was no different, with wage growth outstripping inflation, contributing to the uptick this year.
As is often the case, some shoppers opted to treat themselves by trading-up with some product choices this Christmas. However, with the economic outlook for 2025 remaining relatively weak, and with households facing the prospect of rising bills, this shopper behaviour could be short-lived.”