Retailers had a terrible holiday season as consumer spending stalled. British stores limped to the finish line after a dismal Christmas trading period, with non-food sales failing to deliver needed growth. Overall retail sales rose only slightly, well below the annual average, according to the British Retail Consortium. Non-food sales actually declined during the critical holiday period, reversing previous growth.
Food sales remained resilient, partly due to ongoing inflation, propping up supermarket revenues. Discount grocers Aldi and Lidl reported record performance with notable sales increases. Larger chains like Tesco and Sainsbury's also posted growth, though investor reactions were negative. General merchandise retailers faced severe challenges across clothing, homewares, and gifting categories.
Helen Dickinson, leading the BRC, described the season as a drab Christmas. She noted sales growth slowed for a fourth consecutive month, with many shoppers delaying purchases for later discounts. Consumer card spending fell significantly, marking the steepest annual decline in years. Weak confidence, mild weather, and aggressive promotions were cited as key factors.
The pressure is triggering corporate distress across the sector. Associated British Foods, owner of Primark, issued a profit warning linked to weak fashion sales. Several other retailers are expected to appoint administrators, highlighting the fragile state of the industry. More than half of consumers plan to reduce discretionary spending on items like clothing and dining out.
Food sales remained resilient, partly due to ongoing inflation, propping up supermarket revenues. Discount grocers Aldi and Lidl reported record performance with notable sales increases. Larger chains like Tesco and Sainsbury's also posted growth, though investor reactions were negative. General merchandise retailers faced severe challenges across clothing, homewares, and gifting categories.
Helen Dickinson, leading the BRC, described the season as a drab Christmas. She noted sales growth slowed for a fourth consecutive month, with many shoppers delaying purchases for later discounts. Consumer card spending fell significantly, marking the steepest annual decline in years. Weak confidence, mild weather, and aggressive promotions were cited as key factors.
The pressure is triggering corporate distress across the sector. Associated British Foods, owner of Primark, issued a profit warning linked to weak fashion sales. Several other retailers are expected to appoint administrators, highlighting the fragile state of the industry. More than half of consumers plan to reduce discretionary spending on items like clothing and dining out.
