Silvia Rindone, EY UK&I Retail Lead comments: "It was a mixed picture for retailers in December, leading to a somewhat disappointing end to the year. After a small rise in November, retail sales volumes fell by 0.3% in December, leading to a 0.8% fall in volumes for the final quarter of 2024.
“The overall fall in sales volumes was marginally offset by non-food sales volumes which increased by 1.1% in December. This however, was driven by Black Friday sales and is unlikely to be a sign of sustained recovery. Clothing saw the largest increase, with volumes rising by 4.4%. The amount spent online during December also rose by 1.5%- the first rise since September 2024.
“Despite the overall mixed results, several food retailers saw record sales in December driven by growth in premium own-label products as consumers opted to splash out over the festive season.
“Today’s figures demonstrate the growing divide between retailers who have adapted to changing market conditions and those who have not. The latter are increasingly falling behind as consumers become more selective about their spending.
“Looking ahead, there are several challenges on the horizon in 2025, with retailers predicting declines in sales volumes and increased tax burdens. Rises in National Insurance and the national living wage will impact business costs, prompting many retailers to consider price increases to offset these overheads.
“Despite supressed consumer confidence, many retailers are delivering strong sales and volume growth. These are driven by clarity of their proposition, a deep understanding of their customers’ needs and excellent operational skills. Retailers that have failed to invest in their capabilities or proposition are more likely to be struggling and its unlikely consumer demand will increase quickly enough for many.”