December sales boost fails to save UK retail’s “Golden Quarter”

Christmas fails to save 2024 trading, as new data from the British Retail Consortium (BRC) and KPMG International reveals that UK total retail sales for the year increased by just 0.7 percent from 2023, while non-food declined by 1.5 percent.

For the three months to December, known as the “Golden Quarter,” sales growth was 0.4 percent year-on-year. Non-food sales increased by 4.4 percent year-on-year in December, against a decline of 2.1 percent in December 2023. This was above the 3-month average decline of 1.1 percent and above the 12-month average decline of 1.5 percent, added the BRC.

In-store non-food sales increased by 0.4 percent year-on-year in December, against a decline of 2.9 percent in December 2023. This was above the three-month average decline of 2.4 percent and above the 12-month average decline of 2.2 percent.

While online non-food sales increased by 11.1 percent year-on-year in December, against a decline of 0.8 percent in December 2023. This was above the three-month average growth of 1.2 percent and above the 12-month average decline of 0.4 percent.

Helen Dickinson, chief executive at the British Retail Consortium, said in a statement: “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. Non-food was particularly hard-hit, with sales contracting from the previous year. Food sales fared better over the Christmas period, ticking up slightly from the previous year, meanwhile beauty products, jewellery and electricals made a strong showing under the tree this year.

“While we project sales growth to average 1.2 percent in 2025, this is below the projected shop price inflation of 1.8 percent. This means volumes are likely to fall this year, all while the regulatory and tax burden on retailers will increase costs by 7 billion pounds from rising National Insurance Contributions, increasing national living wage, confirmed in the Budget, 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.”

Christmas sales fail to save 2024 trading in the UK

Accountancy and business advisory firm BDO’s latest high street sales tracker also revealed that while total retail sales in discretionary spend categories grew by +7.7 percent in December, it failed to boost overall growth in the “Golden Quarter”.

BDO adds that Black Friday, Cyber Monday and Christmas Eve drove sales growth both online and in-store in December, like-for-like sales figures for the final three months of 2024 saw overall growth of just +2.0 percent, compared to a base of -1.6 percent in 2023.

The tracker also revealed that bricks-and-mortar shops fared particularly poorly in this period, with sales remaining flat at +0.1 percent compared to 2023’s base of -0.2 percent.

Outside of the first and last weeks of December, which saw the major sales events, high street sales “performed very poorly,” with sales declining -3.91 percent compared to a weak base in 2023 of -3.61 percent, with BDO adding that bad weather and widespread flooding may have driven consumers to shop online, where sales increased by +20.7 percent.

Sophie Michael, head of retail and wholesale at BDO, said: “While December’s overall sales figures saw a slight uptick thanks to major sales events, this is a continuation of the poor performance we’ve seen throughout the so-called ‘Golden Quarter’. After a challenging year, this low level of growth is a real concern for the retail sector. The struggling performance of high street stores is particularly notable, with essentially flat growth against last year’s very poor baseline, meaning that volumes were once again negative.

“While there was optimism as we entered 2024, the reality proved to be a difficult trading year for the retail sector, with economic uncertainty and supply chain disruptions. The biggest concern however is that 2025 is not expected to improve as businesses are yet to feel the impact of increased wage costs introduced in the Budget which disproportionately impacts consumer-facing sectors.”

Consumer card spending stalled in December

Barclays Consumer Spend report also added that consumer card spending growth remained flat in December, at 0.0 percent year-on-year, significantly lower than the latest CPIH inflation rate of 3.5 percent.

The overall retail sector slipped -0.2 percent in the month, however, in the wake of Black Friday and Cyber Monday, gift shopping and seasonal discounts spurred growth of 1.6 percent at general retailers, following a -1.7 percent decline in November. Pharmacy, health and beauty finished the year on a high, having performed strongly throughout all of 2024, boasting 5.8 percent growth.

Growth in online shopping outpaced in-person sales, with online retail (excluding groceries) up 2.6 percent. In comparison, face-to-face retail (excluding groceries) declined -1.2 percent. One in five (17 percent) Brits reported shopping online more frequently in the month, opting to purchase Christmas gifts from the comfort of their homes.