Prices in stores will rise in 2025 as the key Christmas period failed to meet retailers’ expectations, industry data shows.
According to the British Retail Consortium (BRC) and big four accounting firm KPMG, in-store sales rose just 0.4% during the ‘golden quarter’, the three critical months for October shopping. to December.
Many retailers rely on trading during this time to get them through tougher months like January and February. Some make most of their annual income at Christmas.
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This minimal growth occurred against a backdrop of low consumer confidence and difficult economic conditions, the lobby group said, and “reflects the continued careful management of many household budgets,” said Linda Ellett, head of KPMG’s UK consumer, retail and leisure business.
Non-food sales were hardest hit in the four weeks to December 28, according to BRC figures, and were even lower than last year, contracting 1.5%.
What were people buying?
Food sales increased by 3.3% for the whole of 2024, compared to 2023.
Over the festive period, beauty products, jewelry and electrical products performed well, said BRC chief executive Helen Dickinson.
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AI-powered technology and beauty Advent calendars have boosted holiday revenue, Ms. Ellett said.
What this means for next year
While costs for employers are expected to rise in April due to increases in the minimum wage and employer social security contributions, businesses will face higher payrolls.
The BRC believes there is “little hope” of covering these costs through higher sales, so retailers are likely to raise prices and cut investment in stores and jobs, “harming our streets businesses and the communities that depend on them,” said Dickinson.
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Separate figures from major bank Barclays show card spending has remained stable since December 2023, while essential spending fell 3%, partly due to inflationary concerns which have forced consumers to cut spending, but also because of lower fuel costs.
The majority of those surveyed by the lender (86%) said they were concerned about rising food costs and 87% were worried about household bills.
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Many UK retail giants will update shareholders on their Christmas performance this week, including Next on Tuesday, Marks and Spencer and Tesco on Thursday and Sainsbury’s on Friday.