UK Retailers Face Weak Holiday Sales and Rising Costs

Retail sales growth in 2024 fell short of expectations, with businesses bracing for further challenges from inflation, tax hikes, and cautious consumer spending in 2025.

Retail sales during the 'golden quarter' of October to December 2024 rose just 0.4% year-on-year, reflecting limited consumer spending amid economic pressures.
Non-food sales dropped by 1.5% across 2024, while food sales saw modest growth, masking broader struggles in the retail sector.
Retailers anticipate raising prices and cutting investments in response to increased costs from higher National Insurance contributions, minimum wage hikes, and new packaging levies introduced in the recent budget.
Consumer spending patterns showed restraint, with households prioritizing essentials and selectively splurging during the holiday season, while entertainment spending saw a modest uptick.
Economic forecasts for 2025 suggest slow growth, with inflation expected to outpace sales growth, further straining retailers and consumer budgets.