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Shoppers spent more in December than the previous year, but that was not enough to make up for an overall sluggish year for retailers, new figures suggest.
Gifting, including beauty advent calendars, jewelry and AI-based technology, did particularly well at Christmas, the British Retail Consortium (BRC) said.
Growth of 3.2% in December was boosted by a big weekend of Black Friday sales, normally included in November figures.
But with growth for the final three months of 2024 only 0.4% higher than the previous year, it caps off a weak year for retailers overall, and the BRC has warned that 2025 will be “difficult” due to rising taxes and labor costs.
Although many businesses are yet to report on their performance over the Christmas period, the BRC said the new year will see retailers grappling with increased National Insurance contributions, a national living wage higher, as well as new taxes on packaging.
Meanwhile, Barclays reported that consumer spending on debit and credit cards was stable in December. It says people are investing in entertainment and leisure, but this is offset by reductions in some essential spending.
“Difficult” conditions
For the full year, sales in 2024 were 0.7% higher than in 2023.
The BRC said the last-minute increase in sales in December was due to Christmas shopping and the fact that Black Friday sales were included in the month’s figures.
“Sales of food products performed better over the Christmas period, up slightly on the previous year, while beauty products, jewelry and electrical goods performed well under the tree this year ” said BRC chief executive Helen Dickinson.
Although slower than the previous year, food sales increased over the year by 3.3%, and by a higher amount in December.
Budget supermarket Lidl said it had its most successful Christmas ever, boosted by purchases of festive foods such as pigs in blankets and turkey.
But the BRC figures show that people are spending less on other things: sales of non-food products over the year fell by 1.5%.
Overall, the final three months of last year “failed to give 2024 the start retailers were hoping for”, in a “challenging year marked by low consumer confidence and difficult economic conditions ” said Ms. Dickinson.
Retail analyst Natalie Berg of NBK Retail said: “Consumers aren’t battening down the hatches yet.”
But she added: “Shoppers will likely face higher prices and fewer discounts in the coming months.”
Less attendance
Throughout the year, the number of people visiting physical stores declined for the second year in a row, the BRC found.
Footfall fell by 2.2% in 2024, after also declining in 2023, despite measures taken by some stores, such as offering free wine, to attract shoppers.
Even days considered to be exceptional sales days for retailers saw a drop in footfall.
In 2024, Boxing Day saw a 6.2% drop in visitors to high streets and a 4.2% drop to shopping centers compared to the previous year, according to data collected by MRI Software.
In 2025, New Year sales in the first five days of January saw a drop in footfall, with high streets seeing almost 4% fewer visitors than in 2024. The MRI’s Jenni Matthews said the The decline was significant and made worse by travel disruptions and snowfall.
