Retailers suffered a “drab” Christmas as shoppers shunned gifting to hold out for the Boxing Day and January sales, figures suggest.
Total UK retail sales were up 1.2% year-on-year in December – well below last December’s growth of 3.2% and the 12-month average of 2.3%, according to data from the British Retail Consortium (BRC) and KPMG.
Non-food sales fell by 0.3% on last December, against growth of 4.4% last Christmas and below the 12-month average growth of 1.1%.
Food sales were up 3.1%, but even this was on the back of ongoing inflation and below the 12-month average growth of 3.7%.
BRC chief executive Helen Dickinson said: “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.”
Ms Dickinson said: “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.”
Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “While there are individual festive success stories among retailers, retail sales largely froze in December.
“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.”
Separate figures for Barclays shows consumer card spending fell by 1.7% year-on-year in December – the greatest decline since February 2021 as consumers combatted rising costs by making and planning cutbacks.
Despite confidence in household finances rising to 66% from 64% in November, consumers reported increasing concern about food prices and general inflation, rising to 86% and 85% respectively.
More than half of those polled (56%) said they intended to cut discretionary spending, focusing on clothes and accessories (48%) and restaurant meals (47%).
Jack Meaning, chief UK economist at Barclays, said: “These numbers suggest 2025 ended with a whimper, following the slowdown we saw define last year.
“However, we expect inflation to ease significantly in the first half of 2026, which, alongside a further easing of interest rates, should provide consumers with respite, unlocking real spending power.
“If the tentative signs of improving confidence can last beyond the New Year, then UK activity could strengthen as the year goes on.”
