December Sales Fall Short, Offering Little Relief for Retailers

December Sales Fall Short, Offering Little Relief for Retailers.

Shoppers opened their wallets a bit more in December compared to last year, but it still wasn't enough to save what turned out to be a pretty dull year for retailers, according to new data.

The British Retail Consortium (BRC) noted that gifts like beauty advent calendars, jewelry, and AI tech really took off during the Christmas season.

December saw a 3.2% increase, thanks in part to a big Black Friday weekend that usually gets counted in November's totals.

However, the last three months of 2024 only showed a 0.4% growth over the previous year, wrapping up a tough year for retailers. The BRC cautioned that 2025 is likely to be "tough" with rising taxes and wage expenses on the horizon.

While many companies are still waiting to share their Christmas performance, the BRC mentioned that retailers will have to deal with increased National Insurance Contributions, a higher National Living Wage, and new packaging fees in the new year.

On another note, Barclays found that consumer spending on debit and credit cards remained flat in December. People were spending on entertainment and leisure, but that was balanced out by cuts in some essential expenses.

'Difficult' Conditions

Sales in 2024 were up by 0.7% compared to 2023. The BRC noted that a surge in December sales was driven by Christmas shopping and the inclusion of Black Friday sales in that month's totals.

"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," said the BRC's chief executive Helen Dickinson.

Food sales saw a 3.3% increase over the year, although it was slower than the previous year, with a notable boost in December.

Lidl, the budget supermarket, reported its best Christmas ever, thanks to shoppers splurging on festive treats like pigs in blankets and turkey.

However, the BRC's data indicated that spending on non-food items dropped by 1.5% throughout the year.

Overall, the last quarter of the year didn’t quite kick off 2024 as retailers had hoped, with Ms. Dickinson pointing out that it was a tough year characterized by low consumer confidence and challenging economic conditions.

Retail analyst Natalie Berg from NBK Retail said: "Consumers aren't battening down the hatches just yet."

But she added: "Shoppers will likely face higher prices and fewer discounts in the coming months."

Decline In Footfall

The BRC reported that for the second consecutive year, fewer people are hitting up physical stores. In 2024, foot traffic dropped by 2.2%, following a similar trend in 2023, even with some shops trying to lure customers in with perks like free wine.

Even the big sales days that usually draw crowds didn’t see much action. For instance, Boxing Day in 2024 experienced a 6.2% decrease in foot traffic on high streets and a 4.2% drop in shopping centers compared to the previous year, according to data from MRI Software.

Looking ahead to 2025, the New Year sales during the first five days of January also showed a decline, with high streets seeing nearly 4% fewer visitors than in 2024. Jenni Matthews from MRI noted that this drop was quite significant, compounded by travel issues and some snowfall.

LATEST: UFC Boss Dana White Joins Meta's Board of Directors.

The lackluster December sales provide a grim outlook for retailers, signaling a continued struggle in a challenging economic environment. Despite some holiday shopping boosts, overall growth remained minimal, with foot traffic continuing to decline and consumer spending stagnating. Rising costs, such as higher taxes, wages, and new packaging fees, further burden retailers, leaving little room for optimism.

The drop in non-food sales and ongoing decline in physical store visits suggest that the retail sector is far from recovering. As 2025 approaches, the combination of economic pressures and waning consumer confidence points to another tough year ahead for the industry.