UK retailers finish lacklustre 2024 with 'minimal' growth
The UK retail sector experienced a lacklustre 2024, according to fresh data released on Tuesday, with total sales growth slowing down to 0.7% compared to the prior year.
According to the BRC-KPMG retail sales monitor, sales grew 3.2% in December thanks to the Black Friday period running into the month, but the three-month period ending December - the ‘Golden Quarter’ - saw a modest increase of just 0.4%.
Food prices rose 3.3% year on year, outpacing overall retail growth, while non-food sales declined by 1.5%.
“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,” said Helen Dickinson, chief executive at the British Retail Consortium.
“Non-food was particularly hard-hit, with sales contracting from the previous year.”
However, Christmas sales did provide some respite, with food sales ticking up slightly and certain categories like beauty products, jewellery and electricals seeing strong demand.
Meanwhile, retailers were reportedly facing increased costs and pressures.
“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,” said Dickinson.
“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 at KPMG, noted that the late timing of Black Friday had a significant impact on sales patterns.
““December, coupled with Black Friday week at the end of November, delivered welcome sales growth for retailers.
“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.”
Looking ahead to 2025, Ellett predicted that retailers would increasingly use data and AI technology to deliver personalised offers and products.
“We will see retailers increasingly utilising customer data and AI technology to deliver increased personalisation when it comes to targeting products and offers to their current, and potential, customers.”
Reporting by Josh White for Sharecast.com.