December Retail Sales: Glimmers of Hope Amid Economic Struggles

Despite a 3.2% increase in spending during December compared to the previous year, overall retail performance for 2024 remained underwhelming. The British Retail Consortium (BRC) highlighted that last year’s holiday shopping surge, driven partly by Black Friday, was not enough to counterbalance a largely disappointing year for retailers. December’s growth was overshadowed by a mere 0.4% rise in sales over the last quarter of the year, pointing to challenging conditions ahead in 2025 due to rising taxes and wage costs.

Firms like Next have already indicated plans to increase clothing prices to cover a rise in wage expenses, estimated at £73 million. While December saw a boost in certain sectors, particularly beauty products, jewelry, and AI tech gadgets, consumer spending overall was flat, according to Barclays. Essential spending was curtailed, although there was a noticeable interest in entertainment.

For 2024, overall retail sales were reported to be 0.7% higher than in 2023, but this increase came with a drop in non-food item sales by 1.5%. The BRC pointed to the holiday rush as a temporary uplift amidst a year marred by weak consumer confidence and economic difficulties.

In the food sector, sales rose by 3.3% throughout the year, with supermarkets experiencing increased foot traffic during December. Lidl reported its best Christmas ever, attributed to budget-conscious shoppers opting for festive staples. However, bricks-and-mortar shops faced a 2.2% decline in visitor numbers, marking the second consecutive year of decreasing footfall. Notably, Boxing Day and early January saw significant drops in high street visitors, linked to adverse weather conditions and travel disruptions. Retail analysts caution that shoppers can expect higher prices and fewer discounts as the economic landscape remains challenging.