Retail sales edged up just 0.4% in the three months to 28 December (the Golden Quarter) as consumers remained cautious during the key trading period.
The BRC-KPMG Retail Sales Monitor figures are not adjusted for inflation, which has been running at close to 3%, suggesting consumers cut the amount of goods they bought in the run-up to Christmas.
In December, total retail spending rose 3.2% year-on-year, recovering from a 3.3% drop in November. Last month’s rise was the biggest since March, but Black Friday fell in the BRC’s December period in 2024 and in November in 2023, distorting year-on-year comparisons.
Black Friday promotions drove non-food sales up by 4.4% in December, while food sales increased by 1.7%.
Linda Ellett, UK head of consumer, retail and leisure at advisory firm KPMG, said: “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.”
BRC Chief Executive Helen Dickinson added: “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.”
For 2024 overall, total retail sales rose by 0.7% from 2023, with food growth of 3.3% offset by a non-food decline of 1.5%.
The BRC is forecasting sales growth of 1.2% in 2025, below the projected shop price inflation of 1.8%.
Dickinson said the estimates meant volumes were likely to fall this year, adding to pressures on businesses that are already facing a rise in the national living wage and higher employer national insurance contributions from April.
“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,” she said.
“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.”
Meanwhile, separate data published today by Barclays showed no growth in consumer payment card spending figures in December, with contractions in supermarkets, home improvement shops and expenditure on fuel.
NAM Implications:
- There is no way of talking up non-food retail performance in Christmas 2024.
- Key for suppliers and retailers is to accept that any growth in 2025 will be at the expense of rivals…
- Much depends on Relative Competitive Appeal…
- …and being able to communicate advantages that matter to uncertain consumers.
- And even then, fingers crossed…
