‘Drab’ end to 2025 for retailers as Christmas spending remains cautious
Retailers experienced a “drab” festive period at the end of 2025, as consumers continued to spend cautiously in the run up to Christmas, according to the British Retail Consortium (BRC).
Figures from the BRC’s latest retail sales monitor show that growth in sales slowed for the fourth month in a row in December, despite overall sales increasing year-on-year, with many consumers holding out for January sales. .
UK Total retail sales increased by 1.2 per cent year-on-year in December, against a growth of 3.2 per cent in December 2024, according to the BRC’s retail sales monitor.
This was below the 12-month average growth of 2.3 per cent.
It came as Food sales increased by 3.1 per cent year-on-year, against a growth of 1.7 per cent in December 2024. This figure was, however, also below the 12-month average growth of 3.7 per cent.
December Non-Food sales fell by 0.3 per cent year-on-year, compared to a growth of 4.4 per cent in 2024. The figure also landed below the 12-month average growth of 1.1 per cent.
Speaking on the figures, Helen Dickinson, chief executive at the BRC, said: “It was a drab Christmas for retailers, as sales growth slowed for the fourth consecutive month.
“While food sales rose on the back of ongoing food inflation, non-food sales fell flat in the run up to Christmas, with gifting items doing worse than expected.
“Many people were clearly holding out for discounts, with the last week showing significant growth off the back of Boxing Day and beginning of the January sales.”
Ms Dickinson said the figures show that consumer spending “remains cautious” with households squeezed by the cost of living.”
In-Store Non-Food sales decreased by 0.5 per cent year on year in December, while Online Non-Food sales decreased by 0.1 per cent.
The online penetration rate – the proportion of Non-Food items bought online – increased to 38.6 per cent in December from 38.5 per cent in December 2024
Linda Ellett, UK head of consumer, retail & leisure, at KPMG, also described a “challenging” time for retailers.
She said: “While there are individual festive success stories among retailers, retail sales largely froze in December.
“Total retail sales climbed by 1.2 percent, with higher inflation also a factor in the sales growth.
“It remains a challenging time for retailers, with consumers cutting back on spending due to higher household bills and any discretionary spend is being prioritised, particularly toward holidays and home improvements.
“Retailers are also facing increasing costs while needing to invest in innovation. There will be an ever-sharpening focus on business models, efficiencies and profit margin in the months ahead.”
Speaking on consumer shopping behaviour at the end of the year, Sarah Bradbury, CEO, IGD (the Institute of Grocery Distribution), added: “December saw record Christmas grocery sales and a welcome boost in shopper confidence, as often happens during the festive season.
“However, minimal volume growth highlights that the food and drink industry is still under pressure and nearly half of shoppers told us they were more worried about the cost of Christmas this year.
“Retailers responded to shopper concerns by highlighting meal affordability and heavy discounting on fresh produce. Overall, it points to a Christmas where shoppers sought ways to celebrate whilst carefully balancing budgets.”