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Growth in UK retail spending was “minimal” and below the rate of inflation in the final three months of 2024, suggesting consumers remained cautious in what is usually the busiest time of year for shops.
In the three months to December, sales rose just 0.4 percent from the same period in 2023, when the economy was in a technical recession, according to figures released by the British Retail Consortium on Tuesday.
The trade body’s data is not adjusted for headline inflation, which stood at 2.6 percent in November, showing that consumers cut back on the amount of goods they bought over the period.
Linda Ellett, UK head of consumer, retail and leisure at advisory firm KPMG which helps compile the data, said: “Sales growth during the golden quarter of October to December was minimal, reflecting the continued careful management of many household budgets at a time when many costs remain at a higher level than in previous years.”
Non-food sales were hit particularly hard, shrinking from a year earlier, according to the data.
BRC chief executive Helen Dickinson said: “After a challenging year marked by weak consumer confidence and difficult economic conditions, the crucial ‘golden quarter’ failed to deliver the 2024 that retailers were hoping for.
On Tuesday are the first consumer spending figures for the shopping period that covers the global sales events of Black Friday and Christmas, adding to signs that the economy struggled in the final quarter of 2024.
Ministers have come under heavy fire from business since the Budget in October, as bosses complain about higher employers’ national insurance contributions as well as a rise in the National Living Wage.
Low confidence has coincided with weak GDP readings, as the Bank of England estimates the economy failed to grow in the final quarter of 2024 despite a strong start.
Growth in UK manufacturing and services activity fell last month to the slowest level since October 2023, according to data released by S&P Global on Monday.
Sales at brick-and-mortar stores were particularly weak in the final three months of the year, registering a 0.1 percent rise in value terms and a fall in volume terms, according to figures released on Tuesday by accountancy firm BDO.
Meanwhile, separate data released by Barclays showed no increase in consumer card spending figures in December, with contractions in supermarkets, home improvement stores and fuel spending.
The BRC forecasts sales growth of 1.2 per cent in 2025, below forecast shop price inflation of 1.8 per cent.
Dickinson said estimates meant volumes were likely to fall this year, adding to pressures on businesses including the rise in the National Living Wage and higher employers’ national insurance contributions from April.
“With little hope of recovering these costs through higher sales, retailers are likely to raise prices and cut investment in stores and jobs, damaging our high streets and the communities that rely on them,” she said.
