UK retail sales bounced back unexpectedly in December, with consumers rushing to the internet — especially for gold and other shiny metals. Latest figures from the Office for National Statistics (ONS) showed that retail sales were up by 0.4% on last month. That’s a huge bounce-back from deserving this reprimand! After falling 0.1% in November, a much deeper 0.8% fall in October was revised downward. The December figures are especially impressive considering all the headwinds consumers and businesses still face in today’s economy.
Even with this encouraging month-over-month increase, we’re seeing a not so rosy retail overall picture. For the first five months of 2025, UK retail sales were up by a measly 1.3%. In the last three months of the year, sales volumes decreased by 0.3% compared with the third quarter. This sharp turnaround reveals serious vulnerabilities in consumer spending. Retailers, especially supermarkets and non-food retailers, experienced negative growth in sales. Non-food retailers, such as department and clothing stores, saw a significant decline of 0.9%.
The surge in December sales was largely driven by food and non-food stores, as well as non-store retailers, predominantly online sellers. In fact, online jewellers saw an increase in demand for metals such as gold and silver. Demand for these metals tends to increase as they are viewed as safe-haven assets during uncertain times. During the past year, prices for all these metals have skyrocketed, stoking consumer demand.
As retail expert Alice Cowley pointed out, the retail sector’s performance during this pivotal time of year is always worth examining.
“But while food, discounts and holiday preparations pushed up sales, it wasn’t enough to drive significant growth.” – Alice Cowley
Retailers that relied on in-person visits were hit hard. Well, tell that to the thousands of retailers who say the promised seasonal spirit didn’t materialise on the high street.
“With Christmas being a crucial time for the sector, those wishing for a bumper trading period were left disappointed.” – Alice Cowley
Additionally, increasing living expenses have further pressured consumers’ wallets, resulting in more conservative spend. As our Senior Director Neil Bellamy said, that was the mood on the consumer side.
“We remain a long way from consumers feeling that better days are around the corner.” – Neil Bellamy
In October, our own Nicholas Hyett wrote about the plight of bricks-and-mortar retailers. As he put it, “There is no festive cheer on the high street,” pointing to the dangers that legacy retailers are increasingly finding in our online economy.