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Britain’s retailers limped to the end of 2025 after a lacklustre Christmas trading period, with non-food sales failing to deliver the seasonal boost many high street businesses were relying on.
New figures from the British Retail Consortium (BRC) show overall retail sales rose by just 1.2% in December compared with a year earlier — well below the 12-month average growth rate of 2.3%. While food sales proved resilient, demand for non-food items such as clothing, electronics and gifting products fell flat at the most critical time of the year.
Non-food sales slipped by 0.3% year on year in December, a sharp reversal from the 4.4% growth recorded in the same month in 2024. Retailers cited mild, wet weather, weak consumer confidence and heavy discounting as key factors behind the disappointing performance.
Helen Dickinson, chief executive of the BRC, described the trading period as a “drab Christmas”, noting that sales growth has now slowed for the fourth consecutive month.
“Non-food sales fell flat in the run-up to Christmas, with gifting items doing worse than expected,” she said. “Many shoppers were clearly holding back for discounts, with a late surge in activity driven largely by Boxing Day and the start of January sales.”
The subdued mood was reflected in consumer spending data. Barclays reported that card spending fell by 1.7% in December compared with a year earlier, marking the steepest annual decline since February 2021 and worsening from a 1.1% drop in November.
Food inflation continued to prop up supermarket revenues, however. Grocery prices rose by 4.3% in December, according to Worldpanel by Numerator, pushing average supermarket spending to £476 for the month, around £15 more than last year. Yet the pressure on household budgets remains intense, with 64% of shoppers saying they plan to cut grocery spending in 2026, while more than half expect to reduce discretionary purchases such as clothing and eating out.
Discount grocers were the clear winners of the festive period. Aldi reported a 3% rise in sales in the four weeks to 24 December, while Lidl recorded a 10% increase in the four weeks to Christmas Eve, both delivering record festive performances. Tesco and Sainsbury’s also posted Christmas sales growth, although their share prices fell last week after investors had anticipated stronger results.
Elsewhere, the picture was far more challenging. General merchandise retailers struggled across categories including clothing, jewellery and homewares. Argos, owned by Sainsbury’s, reported a 2.2% drop in sales over the six weeks to 3 January, citing weak online traffic, aggressive promotions and fragile consumer sentiment.
The pressure is already feeding through to corporate distress. Shares in Associated British Foods, owner of Primark, have fallen around 15% this year following a profit warning linked to weak fashion sales. Meanwhile, several retailers — including Claire’s, The Original Factory Shop and LK Bennett — are expected to appoint administrators, underscoring the fragile state of the UK’s retail sector as it heads into 2026.
