UK retailers see softer year-end as December sales momentum fades

Non-food sales slipped 0.3 per cent YoY during the month, reversing a robust 4.4 per cent increase a year earlier and underperforming the 12-month average growth of 1.1 per cent. The decline was evident across both physical and digital channels, the BRC said in a press release.

In-store non-food sales fell 0.5 per cent YoY in December, compared with a 0.4 per cent rise in December 2024, and remained below the 12-month average growth of 0.9 per cent. Online non-food sales also weakened, edging down 0.1 per cent YoY after a strong 11.1 per cent increase a year earlier, and trailing the 12-month average growth of 1.5 per cent.

Despite the slowdown in online sales growth, the online penetration rate for non-food items increased marginally to 38.6 per cent in December from 38.5 per cent a year earlier, remaining above the 12-month average of 37.2 per cent.

“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. Despite the disappointing December 2025 saw stronger sales growth overall, as non-food recovered from its 2024 decline,” said Helen Dickinson, chief executive at BRC.

“These figures show that consumer spending remains cautious, with households squeezed by the rising cost of living. Now is the time to support struggling families with the cost of food and essentials and give the economy the boost it needs. 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,” added Dickinson.

“While there are individual festive success stories among retailers, retail sales largely froze in December. Total retail sales climbed by 1.2 per cent, with higher inflation also a factor in the sales growth,” said Linda Ellett, UK head of consumer, retail and leisure, KPMG.

“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,” added Ellett.

Fibre2Fashion News Desk (SG)