December 2024 marked a notable uptick for supermarkets, emerging as the busiest month since the pre-lockdown shopping frenzy of 2020. Retailers experienced a last-minute sales surge driven by holiday shopping and the inclusion of Black Friday figures in December's totals. This growth was partly attributed to consumers gravitating towards own-brand products as they navigated tighter budgets.
Despite this December success, the New Year brought a stark contrast for retailers. The first five days of January 2025 saw a decline in foot traffic, with high streets recording nearly 4% fewer visitors compared to the previous year. Jenni Matthews from MRI highlighted that this drop was exacerbated by travel disruptions and snowfall, adding to the challenges faced by physical retail locations.
The British Retail Consortium (BRC) reported that the last quarter of 2024 failed to provide the anticipated boost for retailers, attributing it to weak consumer confidence and challenging economic conditions. With a growth rate of only 0.4% over the final three months of the year compared to 2023, retailers have been left with mixed feelings about their performance.
BRC Chief Executive Helen Dickinson noted that food sales showed slight improvement during the Christmas period, while beauty products, jewellery, and electrical items also performed well as gifts. However, non-food sales saw a decline of 1.5% over the year, indicating ongoing difficulties in the retail sector.
Natalie Berg, a retail analyst at NBK Retail, emphasized that while consumers are still spending, they are becoming more cautious. "Consumers aren't battening down the hatches just yet," she stated, adding that shoppers could face "higher prices and fewer discounts in the coming months." This shift in consumer behavior is expected to impact the retail landscape as the year progresses.
In December, budget supermarket Lidl celebrated its most successful Christmas to date, driven by strong sales of festive foods like pigs in blankets and turkey. The BRC’s report indicated that December's overall sales growth reached 3.2%, largely thanks to the significant sales weekend associated with Black Friday.
Footfall in bricks-and-mortar shops fell for the second consecutive year, dropping 2.2% in 2024. Even with some retailers attempting to lure shoppers through promotions such as free wine, many struggled to maintain visitor numbers. The warning from the BRC about further challenges in 2025 looms large, with rising taxes and wage costs expected to create additional pressures.