BRC warns of 2025 falling sales volume despite December sales growth

The British Retail Consortium (BRC) has warned of possible falling sales volume in 2025 despite the modest increase in total retail sales experienced in December 2024.

UK total retail sales in December 2024 increased by 3.2% year on year, against a growth of 1.9% in December 2023, according to new data from the BRC and KPMG International.

This was above the three-month average growth of 0.4% and above the 12-month average growth of 0.7%.

The UK total retail sales of 2024 overall increased by 0.7% from 2023, and for the three months to December (the Golden Quarter), sales growth was 0.4% year on year.

Food sales also saw an increase by 1.7% year on year in December, against a growth of 6.3% in December 2023. However, this was below the three-month average growth of 2.1% and below the 12-month average growth of 3.3%.

Meanwhile, non-food sales were up by 4.4% year on year in December, against a decline of 2.1% in December 2023. This was above the three-month average decline of 1.1% and above the 12-month average decline of 1.5%.

In-store non-food sales also increased by 0.4% year on year in December, against a decline of 2.9% in December 2023. This was above the three-month average decline of 2.4% and above the 12-month average decline of 2.2%.

Additionally, online non-food sales increased by 11.1% year on year in December, against a decline of 0.8% in December 2023. This was above the three-month average growth of 1.2% and above the 12-month average decline of 0.4%.

Lastly, the online penetration rate (the proportion of non-food items bought online) increased to 39.6% in December from 37.2% in December 2023. This was above the 12-month average of 36.6%.

Helen Dickinson, chief executive at the British Retail Consortium, 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. Non-food was particularly hard-hit, with sales contracting from the previous year. Food sales fared better over the Christmas period, ticking up slightly from the previous year, meanwhile beauty products, jewellery and electricals made a strong showing under the tree this year.

“While we project sales growth to average 1.2% in 2025, this is below the projected shop price inflation of 1.8%. This means volumes are likely to fall this year, all while the regulatory and tax burden on retailers will increase costs by £7bn from rising National Insurance Contributions, increasing national living wage, confirmed in the Budget, and new packaging levies.”

She added: “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. The government must find ways to mitigate this, so that retailers can invest more in growth and jobs, starting with its planned business rates reform where it must ensure that no shop ends up paying higher rates than they do already.”

Linda Ellett, UK head of Consumer, Retail and Leisure, KPMG, added: “With Black Friday falling as late as it did, this year it was part of the Christmas shopping season even more so than in previous years. December, coupled with Black Friday week at the end of November, delivered welcome sales growth for retailers.

“Computing and mobile phones, and beauty products, particularly saw sizable jumps in sales both in-store and online, with the likes of AI-enabled tech and beauty advent calendars boosting festive takings.However, 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.”