Retailers had a “drab” Christmas, with minimal volume growth in food as shoppers worried about costs, according to analysis from the BRC.
Total retail sales slowed for the fourth consecutive month in December to 1.2% year on year, according to the latest BRC-KPMG Retail Sales Monitor. The rate was below the 12-month average of 2.3% growth and down from 3.2% growth in December 2024.
In food, record value sales masked weaker volume growth, despite retailers highlighting their value Christmas dinner offers and deeply discounted festive veg. December food sales were up 3.1% year on year, compared with a 12-month average of 3.7% and 1.7% growth in December 2024.
Non-food sales fell by 0.3% year on year in the month, compared with a 12-month average of 1.1% growth and 4.4% growth in December 2024.
“It was a drab Christmas for retailers, as sales growth slowed for the fourth consecutive month,” said BRC CEO Helen Dickinson.
“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.
“These figures show that consumer spending remains cautious, with households squeezed by the rising cost of living.”
On food sales, IGD CEO Sarah Bradbury said: “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.”
In-store non-food sales fell by 0.5% year on year in December, compared with a 12-month average of 0.9% growth and 0.4% growth in December 2024.
Online non-food sales fell by 0.1% year on year in December, compared with a 12-month average of 1.5% growth and 11.1% growth in December 2024.
Meanwhile the proportion of non-food items bought online increased to 38.6% in December, compared with a 12-month average of 37.2% and 38.5% in December 2024.
Separate data from Barclays showed consumer card spending fell by 1.7% year on year in December, a further decline from November (–1.1%) and considerably less than the latest CPIH inflation rate of 3.5%. It marked the greatest year-on-year decline in spending since February 2021 (–9.5%), as consumers combated rising costs by making cutbacks, according to Barclays.
The BRC’s Dickinson said now was the time for the government to do more to support growth. “From business rates to the implementation of the Employment Rights Act, there are plenty of opportunities for government to mitigate costs for retailers and prices for customers,” she said.
Linda Ellett, KPMG UK head of consumer, retail & leisure, said: “While there are individual festive success stories among retailers, retail sales largely froze in December. Total retail sales climbed by 1.2%, 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.”
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