UK retail sales increased by just 0.7% last year after a weak final quarter, as non-food sales remained in decline despite persistent inflation.
For the three months to December – the golden quarter – sales growth was 0.4% year on year.
In December itself, UK total retail sales were up 3.2% year on year compared to 1.9% in December 2023 – though this is largely explained by Black Friday falling in December this year, which shifted spend from November to December.
Food sales increased by 1.7% year on year in December, against growth of 6.3% in December 2023.
This was below the three-month average growth of 2.1% and below the 12-month average growth of 3.3%.
Overall food sales were 3.3% in 2024, while non-food was in decline of 1.5% for the year.
“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,” said Helen Dickinson, CEO at the British Retail Consortium. “Non-food was particularly hard-hit, with sales contracting from the previous 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, 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 at KPMG, added: “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. 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.
IGD CEO Sarah Bradbury said of the food and drink sector: “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.”
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