UK retail sales spending growth was “minimal” and below the rate of inflation in the final three months of 2024, suggesting consumers remained cautious in what is typically the busiest period of the year for shops.
In the three months to December, sales were up only 0.4 per cent from the same period in 2023, when the economy was in a technical recession, according to figures published by the British Retail Consortium on Tuesday.
The trade body’s data is not adjusted for headline inflation, which stood at 2.6 per cent in November, indicating consumers cut 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 ongoing careful management of many household budgets during a time when many costs remain at a heightened level compared to past years.”
Non-food sales were particularly hard hit, contracting from the year before, according to the data.
BRC chief executive Helen Dickinson said: “Following a challenging year marked by weak consumer confidence and difficult economic conditions, the crucial ‘golden quarter’ failed to give 2024 the send-off retailers were hoping for.”
Tuesday’s are the first consumer spending figures for the shopping period covering global sales event 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 bemoan higher employer national insurance contributions, as well as increases in the national living wage.
Subdued 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 lowest since October 2023, according to data published by S&P Global on Monday.
Sales at bricks-and-mortar stores were especially poor in the last three months of the year, registering 0.1 per cent growth in value terms and falling in volume terms, according to figures published on Tuesday by accountancy firm BDO.
Meanwhile, separate data published by Barclays showed no growth in consumer card spending figures in December, with contractions in supermarkets, home improvement shops and expenditure on fuel.
The BRC forecasts sales growth of 1.2 per cent in 2025, below the projected shop price inflation of 1.8 per cent.
Dickinson said the estimates meant volumes were likely to fall this year, adding to pressures on businesses including the rise in the national living wage and higher employer national insurance contributions from April.
“With little hope of covering these costs through higher sales, retailers will likely push up prices and cut investment in stores and jobs, harming our high streets and the communities that rely on them,” she said.
