The reports coming out of UK retail in recent weeks have been very contradictory. Some have shown weak footfall to stores last month, others strength at shopping centres. We’ve heard a lot about how badly the sector (and especially fashion) did. But then we’ve also had a raft of big names reporting almost-stellar sales figures.

So what are we to believe? Well, if the Office for National Statistics is any guide (and it should as it’s the UK’s official stats body), last month at retail was… not brilliant. But there was an upside for the fashion sector (more of that later).

Monthly sales volumes fell slightly, with the body estimating them to have dipped by 0.3%, following a small rise of 0.1% in November (revised down from 0.2% in its last publication).

That may not seem like much of a dip, but given that last month was the year’s key shopping period, it’s worrying.

And the fashion upside? Drops in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, which rebounded from falls in recent months.

The ONS said clothing stores made the largest upward contribution to December’s figures with a 4.4% rise, rebounding from falls of 3.5% in November and 3.3% in October. Department stores also rose, boosted by Christmas shopping. 

Looking at the ‘golden quarter’ for retail as a whole, sales volumes fell by 0.8% compared to the previous three months. Again, that’s not brilliant given that the October to December quarter should, in theory, be so much better than the July to September one, even with the impact of holiday and Back to School spending. But at least sale volumes rose in Q4 by 1.9% year on year.

After all that, there’s a big caveat that puts a better spin on December. The ONS data was seasonally adjusted for the month given that the Black Friday period was later this year and some Black Friday-linked sales would have happened in December, whereas they didn’t last year. If we look purely at last month’s figures without factoring out that calendar effect, sales actually rose 10%.

Online boost

The ONS also looked at online sales, but by value rather than volume. It said the amount spent online month on month rose by 1.5% during December. And sales values rose 1.7% year on year. But for the golden quarter, they were down 3.3% when compared to the late summer/early autumn quarter. 

So what did retail insiders and analysts think of all this? Deann Evans, MD EMEA, at global commerce platform Shopify told FashionNetwork.com: “Following an uplift in November, the industry will be disappointed to see a fall in December sales – especially after what was a successful Black Friday Cyber Monday (BFCM) weekend.”

But as mentioned earlier, the performance across retail was patchy, with some doing better than others. And Shopify’s own data showed that in the UK, the number of consumers purchasing from merchants rose by 36% with London ranking third in the top selling cities behind Los Angeles and New York.

Interestingly, it also showed people buying really practical products like garment steamers (+130%), ironing boards (+107%) and cleaning gloves (+99%)!

Bruce Findlay, MD – retail at mall landlord Landsec, also highlighted the performance variations for retail: “The best places are outperforming national benchmarks, consistently showing resilience despite overlapping macro pressures in the market. Across our portfolio and beyond, consumers are prioritising in-person and shared experiences — and it’s driving footfall and sales performance at best-in-class destinations.”

Meanwhile, Oliver Vernon-Harcourt, head of retail at Deloitte, added:  “Festive spending failed to provide a much-needed boost to retail in the latter part of 2024. This worse-than-expected performance for the sector, particularly in food, reflects how nervous consumers are still making cut backs despite the easing of inflationary pressures. A boost to clothing could be explained by a cold snap of weather and gift-giving.

“Our Deloitte Consumer Tracker data shows that one in two consumers were generally more frugal with their December spending and consciously cut down on luxuries. The priority for retail leaders now revolves around combatting looming cost increases, particularly from rising National Insurance Contributions. 

“Consumer confidence is showing signs of resilience, but isn’t recovering at the rate needed to lift spending. Therefore, retailers must remain focused on navigating these upcoming challenges to ensure long-term profitability and stability in a very challenging environment.”

Discounts and more discounts

Finally, some poured cold water on the good news for fashion. Lisa Hooker, PwC UK leader of industry for consumer markets, said the sector was basically “helped by widespread and extended discounting following a challenging year”. But she also highlighted “the desire to refresh the wardrobe for festive celebrations” and said “beauty, jewellery and electricals performed better than other categories”.

And Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, added: “Despite record-breaking sales for some retailers over Christmas, plus the later than usual Black Friday event, it was a disappointing end to 2024 for the sector. A lacklustre golden quarter is particularly concerning after a tough year as retailers would have been hoping for a Christmas boost.

“Many retailers had little choice but to launch their Boxing Day discounting early to maximise sales and clear as much stock as possible ahead of the seasonal slowdown in January. However, without the ‘golden’ boost to sales many retailers will find it difficult to navigate the imminent headwinds post-Budget and we could see prominent brands struggle to compete in 2025.  

“Retailers are resilient, but the constant bombardment of challenges means many are in ‘fight or flight’ mode which impacts pricing, people decisions, strategic investment and future growth. While the longer-term economic outlook is one of cautious optimism, the hope is that consumer confidence continues building. Once this happens, shoppers should return to the high street and provide a boost to retail spending, which the sector is pinning its hopes on.”