Christmas fails to save 2024 trading, says BRC

Following a difficult yr marked by weak client confidence and troublesome financial situations, the essential ‘golden quarter’ failed to offer 2024 the send-off retailers had been hoping for.

In keeping with the most recent BRC-KPMG Retail Gross sales Monitor, UK Complete Retail gross sales elevated by 3.2% yr on yr in December, in opposition to a progress of 1.9% in December 2023. This was above the 3-month common progress of 0.4% and above the 12-month common progress of 0.7%.

Non-Meals gross sales elevated by 4.4% yr on yr in December, in opposition to a decline of two.1% in December 2023. This was above the 3-month common decline of 1.1% and above the 12-month common decline of 1.5%.

In-Retailer Non-Meals gross sales elevated by 0.4% yr on yr in December, in opposition to a decline of two.9% in December 2023. This was above the 3-month common decline of two.4% and above the 12-month common decline of two.2%.

On-line Non-Meals gross sales elevated by 11.1% yr on yr in December, in opposition to a decline of 0.8% in December 2023. This was above the 3-month common progress of 1.2% and above the 12-month common decline of 0.4%.

For 2024 total, UK Complete Retail gross sales elevated by 0.7% from 2023. Meals progress was 3.3% and the Non-Meals decline was 1.5% for the yr. For the three months to December (the Golden Quarter), gross sales progress was 0.4% yr on yr.

The net penetration price (the proportion of Non-Meals gadgets purchased on-line) elevated to 39.6% in December from 37.2% in December 2023. This was above the 12-month common of 36.6%.

Helen Dickinson, Chief Government on the British Retail Consortium, stated: “Non-food was notably hard-hit, with gross sales contracting from the earlier yr. Meals gross sales fared higher over the Christmas interval, ticking up barely from the earlier yr, in the meantime magnificence merchandise, jewelry and electricals made a robust displaying beneath the tree this yr.

“Whereas we mission gross sales progress to common 1.2% in 2025, that is beneath the projected store value inflation of 1.8%. This implies volumes are more likely to fall this yr, all whereas the regulatory and tax burden on retailers will improve prices by £7bn from rising Nationwide Insurance coverage Contributions, growing nationwide residing wage, confirmed within the Finances, and new packaging levies.

“With little hope of protecting these prices by way of greater gross sales, retailers will possible push up costs and reduce funding in shops and jobs, harming our excessive streets and the communities that depend on them. Authorities should discover methods to mitigate this, in order that retailers can make investments extra in progress and jobs, beginning with its deliberate enterprise charges reform the place it should make sure that no store finally ends up paying greater charges than they do already.”

Linda Ellett, UK Head of Client, Retail & Leisure, KPMG, stated: “With Black Friday falling as late because it did, this yr it was a part of the Christmas buying season much more so than in earlier years.

“December, coupled with Black Friday week on the finish of November, delivered welcome gross sales progress for retailers.  Computing and cellphones, and wonder merchandise, notably noticed sizeable jumps in gross sales each in-store and on-line, with the likes of AI-enabled tech and wonder introduction calendars boosting festive takings.

“Nonetheless, gross sales progress throughout the golden quarter of October to December was minimal, reflecting the continuing cautious administration of many family budgets throughout a time when many prices stay at a heightened degree in comparison with previous years.

“In 2025, we’ll see retailers more and more utilising buyer information and AI expertise to ship elevated personalisation in relation to concentrating on merchandise and provides to their present, and potential, clients.”