Cost of living continues to squeeze spending in the UK

The British Retail Consortium has published its latest data, showing that consumers are still exercising tight control over their spending, even during the busy Christmas period.

The data shows that total retail sales increased by 1.2% year on year in December, against a growth of 3.2% in December 2024. This was below the 12-month average growth of 2.3%.

In addition:

Food sales increased by 3.1% year on year in December, against a growth of 1.7% in December 2024. This was below the 12-month average growth of 3.7%.
Non-Food sales decreased by 0.3% year on year in December, against a growth of 4.4% in December 2024. This was below the 12-month average growth of 1.1%.
In-Store Non-Food sales decreased by 0.5% year on year in December, against a growth of 0.4% in December 2024. This was below the 12-month average growth of 0.9%.
Online Non-Food sales decreased by 0.1% year on year in December, against a growth of 11.1% in December 2024. This was below the 12-month average growth of 1.5%.

“It was a drab Christmas for retailers, as sales growth slowed for the fourth consecutive month. While food sales rose on the back of ongoing food inflation, non-food sales fell flat in the run-up to Christmas, with gifting items doing worse than expected,” said Helen Dickinson, Chief Executive at the British Retail Consortium.

“Many people were clearly holding out for discounts, with the last week showing significant growth off the back of Boxing Day and the beginning of the January sales. Despite the disappointing December, 2025 saw stronger sales growth overall, as non-food recovered from its 2024 decline.”

Dickinson noted that these figures show that consumer spending remains cautious, with households squeezed by the rising cost of living.

“Now is the time to support struggling families with the cost of food and essentials and give the economy the boost it needs.

From business rates to the implementation of the Employment Rights Act, there are plenty of opportunities for the government to mitigate costs for retailers and prices for customers,” she said.