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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 during what is typically the most busiest of the year for stores.
In the three months to December, sales rose just 0.4% compared to the same period in 2023, when the economy was in a technical recession, according to figures released Tuesday by the British Retail Consortium.
The trade body’s data is not adjusted for headline inflation, which rose to 2.6 percent in November, indicating that consumers reduced the amount of goods they purchased over of the period.
Linda Ellett, UK head of consumer, retail and leisure at consultancy KPMG who helps compile the data, said: “Sales growth in the golden quarter from October to December has been minimal, reflecting the continued careful management of many household budgets at a time when many costs remain high compared to previous years.
Non-food sales were particularly hard hit, down from a year earlier, the data showed.
Helen Dickinson, chief executive of BRC, said: “After a difficult year marked by low consumer confidence and challenging economic conditions, the crucial ‘golden quarter’ failed to give 2024 the start retailers had hoped for. .
The figures released on Tuesday are the first consumer spending figures for the shopping period covering the global sales events Black Friday and Christmas, reinforcing signs that the economy struggled in the final quarter of 2024.
Ministers have come under fire from the business community since the October budget, as bosses deplore increases in employers’ social security contributions, as well as an increase in the national living wage.
The subdued confidence coincided with weak GDP figures, with the Bank of England estimating that the economy failed to grow in the final quarter of 2024, despite a strong start.
Growth in manufacturing and services activity in the UK fell last month to its lowest level since October 2023, according to data released on Monday by S&P Global.
Sales in physical stores were particularly weak in the last three months of the year, growing 0.1 percent in value and falling in volume, according to figures released Tuesday by accounting firm BDO.
Separate data released by Barclays showed no growth in consumer card spending in December, with contractions at supermarkets, home improvement stores and fuel spending.
The BRC forecasts sales growth of 1.2 per cent in 2025, lower than expected in-store price inflation of 1.8 per cent.
Dickinson said the estimates meant volumes were likely to decline this year, adding to pressures on businesses including the increase in the national living wage and increased employers’ national insurance contributions from April.
“With little hope of covering these costs through higher sales, retailers are likely to raise prices and cut investment in stores and jobs, harming our high streets and the communities that depend on them,” he said. she declared.
