Christmas 2024 marked a milestone for British households, delivering record-breaking take-home sales of £13.8 billion, an increase of £0.5 billion or 3.4 per cent compared to the previous year over the four weeks to 29 December 2024, Kantar reported on Monday (27).
However, while spending grew, the volume of goods purchased remained flat, reflecting the ongoing impact of inflation on consumer behaviour.
Grocery inflation, though lower than in previous festive seasons, remained a significant factor and was at 3.7 per cent last December.
Kantar stated that key Christmas staples such as chocolate, chilled desserts, spirits and fresh meat experienced notable price increases, with chocolate rising by 13 per cent.
Despite higher prices, consumers embraced premium own-label options, which grew by an impressive 14.6 per cent year-on-year and accounted for a record 7 per cent of total sales.
Comfortable households leaned toward own-label offerings, while struggling shoppers invested in trusted brands, which captured almost half of their spend.
Online shopping continued to outpace in-store sales, growing by £100 million when compared with Christmas 2023. Discounters also performed strongly, with sales rising by 4.8 per cent to £2.6 billion. Amazon retained its position as the leading general merchandise retailer, while TikTok made a notable entrance into UK social commerce, marking a shift in how consumers engage with retailers online.
Food outshone drink in festive baskets, with premium products, indulgent treats and sober curiosity shaping choices. Sales of low and no-alcohol options grew by 5.5 per cent, while alcohol sales declined overall by 1.7 per cent. Champagne was a rare exception, gaining £1.8 million from wine sales.
While supermarkets remained the dominant channel for holiday spending, their share of the market fell by 0.9 percentage points from 2023. Promotions remained consistent with the previous year, with Tesco leading the charge at 44% of spend on deals.
After a stagnant 2023, general merchandise experienced a significant boost this Christmas, with sales rising by 7 per cent when compared with Christmas 2023. Savvy British shoppers also spent more in the period leading up to Black Friday demonstrating the importance of preparation.
Looking ahead to Christmas 2025, stability in inflation is expected to bolster consumer confidence. Online sales are likely to continue their upward trend, driven by the grocery sector and general merchandise.
Retailers who capitalise on key seasonal opportunities, such as summer categories, and enhance their omnichannel strategies are well-positioned to thrive in the evolving market.
A good majority of Brits likes to support small businesses all the year round, shows a recent survey, suggesting affection for the UK’s small businesses remains strong.
According to a recent from American Express based on the survey of 2,000 adults, two-thirds (63 per cent) of consumers believe it is important to support small independent businesses all year round, and not just during seasonal peaks like Small Business Saturday, which in 2024 saw a collective £634m spent in-store and online.
Consumers highlighted various reasons why they would continue shopping small, including how these businesses boost the appeal of their local high street (53 per cent); the personalised experience they enjoy when shopping (50 per cent); and a desire to support their local community (43 per cent).
Brits will be taking an increasingly savvy approach to their spending, the research found.
Half (50 per cent) of all respondents say they will buy from alternative retailers if they feel they can get a better deal elsewhere, with a third (33 per cent) stating they would be encouraged to do so by specific offers.
Shoppers plan to lean into ways of achieving greater value for money this year, compared to last; buying pre-loved items, maximising seasonal sales, and using payment cards that offer rewards and points on their purchases were among the top ranked tactics.
Furthermore, Gen Z and Millennial shoppers ranked as the most thorough when it comes to their research before spending, particularly if planning to purchase big ticket items like furniture. Almost three quarters (73 per cent) of this age group said they either always or sometimes seek recommendations in advance.
Dan Edelman, UK general manager, merchant services at American Express, said, “The one guarantee with retail is that it never stands still, and it’s the retailers who best meet ever-evolving customer expectations that will succeed.
"Our research identifies some distinct priorities that are likely to influence consumer spending behaviour in the months ahead.
“For small businesses, it’s hugely positive to see continued recognition of, and affinity for, shopping small highlighted by the research.
"Small businesses pride themselves on the unique experiences and service they offer, something that clearly appeals to consumers.”
Small businesses are "18 times less likely" to offer an apprenticeship scheme as compared to large businesses, a recent report has claimed, adding that some small businesses are not taking proactive steps to recruit apprentices from lower socioeconomic backgrounds.
Co-op in a report released on Monday (10) points out how more than a third (38 per cent) of school leavers face a lack of apprenticeship opportunities in their local area.
Co-op finds that two in three (68 per cent) school leavers agree that apprenticeships are more important now than in previous years, with almost half (48 per cent) seeing an apprenticeship as the most beneficial way of entering the world of work.
However, despite those from lower socioeconomic backgrounds being more likely to apply for an apprenticeship (73 per cent v 66 per cent), many are facing barriers to accessing apprenticeships.
Co-op’s research also included a survey of business leaders, which found that seven in ten agree that a socioeconomic gap exists when it comes to hiring apprentices. It also finds that small businesses are 18 times less likely to offer an apprenticeship scheme compared to large businesses.
Amongst those that do, one in five small businesses are not taking proactive steps to recruit apprentices from lower socioeconomic backgrounds.
The top reasons for this lack of proactive recruitment include: a lack of time and resources (38 per cent), uncertainty about how to access diverse talent pools (33 per cent), insufficient funding to support apprenticeship programmes (29 per cent), and concerns over increased training costs (14 per cent).
Furthermore, businesses in less advantaged areas lack higher level apprenticeship schemes, with only a quarter (26 per cent) of business leaders in these areas offering level six or seven apprenticeships, states the report.
Claire Costello, Co-op’s Chief People and Inclusion Officer, says, “The research paints a picture of the real and widespread relationship between an individual’s socioeconomic background and their unequal access to apprenticeship opportunities post-school.
"There has never been a more important time for the Government and UK businesses to stand up to reality and do more to ensure access to apprenticeships is fair and equitable for all young people.
"Someone’s background should not limit their career potential which is why we’re calling on an amendment to the IfATE Bill - to level the playing field so everyone can have a fair shot at reaching their full potential.”
The research comes as Co-op has written to the Education Secretary calling on the Government to give Skills England a statutory duty to improve social mobility across the country.
High streets need to optimise for midweek office workers as Brits return to office, as shown by latest data on footfall, suggesting areas of focus for retailers such as extending trading hours in the evening and paying attention on grab-and-go meals.
According to the latest data from retail tech specialist MRI Software, retail footfall bucked seasonal trends in January, rising +1.4 per cent year on year across all UK retail destinations,
This marks the first annual increase in January footfall since 2016 (+1.2 per cent), outside of the pandemic period, suggesting that a stronger return to office work is driving retail visits as businesses push employees back to in-person work.
As expected, post-holiday footfall dropped sharply month on month, falling by almost -20 per cent across all UK retail destinations.
The decline was most pronounced in the second week of January, coinciding with schools and offices reopening, exacerbated by heavy snowfall and widespread travel disruptions.
High streets bore the steepest decline, with footfall plunging -22.4 per cent from December to January, followed by shopping centres at -21.7 per cent, while retail parks fared slightly better with a -16.5 per cent decline.
However, the shift back to office-based work was evident throughout January.
Weekday footfall rose by +1.6 per cent year on year, while weekend footfall dropped by -3.5 per cent, underscoring the growing weekday retail opportunity.
MRI Software’s Central London Back to Office benchmark showed a +1.4 per cent annual footfall increase, largely driven by a +4.4 per cent uplift during early evening hours (17:00-20:00). The trend suggests that after-work activity is picking up, offering retailers an opportunity to tap into office workers' midweek spending habits.
Data from MRI Software’s Consumer Pulse report reveals that evening shopping (post-5PM) is now the most common time for office workers to visit retail destinations, with 34 per cent preferring to shop after work.
Tuesdays, Wednesdays, and Thursdays see the highest overlap between office attendance and retail activity, with 58 per cent of respondents working in the office on Tuesdays and aligning shopping trips for midweek convenience.
Additionally, 31 per cent of respondents reported visiting high streets during lunch hours—more than any other retail destination—highlighting the importance of proximity and convenience for office workers on their break.
Customer habits of snacking and alcohol consumption are expected to see a major shift in the coming years with growing evidence that weight loss medication users show little interest in snacking, consuming alcohol, or even eating between meals, a recent report has stated.
This was one of the key messages from ‘The 2025 Show’, a virtual event hosted by MMR Research, where top industry voices unpacked what’s coming next for brands and product innovation.
According to event host Andrew Wardlaw, Chief Ideas Officer at MMR Research, GLP-1 medications appear to work in two ways- physically, by lowering blood sugar, delaying gastric emptying, and in some cases, creating feelings of nausea. And neurologically, by interfering with the brain’s reward systems.
“In effect, GLP-1 medications are shutting down desire,” Wardlaw said.
The event featured several real-world consumer experiences, where users shared stories of dramatic reductions in daily cravings.
With the food and beverage industry at risk from the rising incidence of GLP-1 households, Wardlaw highlighted the importance of maximising curiosity at the shelf to mitigate the effects of this unprecedented assault on impulsive behaviour.
Lori Herman, insights leader at Mondelez, North America, acknowledged the impact of GLP-1 medications on the food and beverage.
She said, “You need to eat a lot of protein apparently when you are utilising this medication, and I feel like that’s going to benefit brands that are inherently protein rich. I think we will see the emergence of even more protein-rich snacks come into the market as a result.”
Herman added, “So, I do think it will impact the types of products we are seeing as it potentially becomes a little bit more mainstream.”
The event further covered the importance of new and novel experiences among consumers.
Pointing to recent research by MMR Research across key economic regions, Wardlaw urged manufacturers to escalate innovation that champions new flavours, new pack formats, extreme and unexpected sensory profiles, and product experiences that have the potential to go viral.
“We know that conversations about new and novel experiences are rising dramatically – up 23% in posts involving food and drink in the last 12 months, for example”, Wardlaw claimed.
Interactions with over 3000 consumers showed that people are interested in discovering new products and experiences to break the monotony of everyday life, adding daily glimmers – often FOMO fuelled by platforms such as TikTok.
Wardlaw concluded: “Beyond industry yardsticks such as ‘liking’ and ‘overall appeal’ lies a complex network of emotional needs.
"We know that people are often drawn to brands and products because they make them feel adventurous, socially connected, discerning, and so on.
"These motivations have little to do with ‘liking’ and everything to do with identity and aspiration. Increasing our efforts on building superior emotional outcomes will help manufacturers mitigate the risks that GLP-1.
“We think brands can still market irresistible products, but via a different kind of reward system.”
Sales of low and no-alcohol beer were 20 per cent higher in December than January, shows recent data, suggesting that traditionally the month of abstinence has been overtaken by December in terms of alcohol consumption.
According to a recent report in The Times, supermarket Tesco experienced record demand for alcohol-free beverages in the four weeks running up to Christmas with sales up by more than 15 per cent on the previous year. The demand was largely driven by young Brits.
According to David Albon, a beer and cider buyer at Tesco, quite contrary to five years ago when the main demand for no and low drinks came in ‘dry January’, it is now a trend, especially in young people, to moderate drinking at these key occasions of the year as well.
“It’s a very different picture to what we were seeing, even just five years ago, when the main demand for no and low drinks came in ‘dry January’.”
Tesco confirmed that interest in dry January is still growing, with demand for no and low-alcohol wine particularly strong during the month and sales up 15 per cent. Sales of alcohol-free beer were up 10 per cent and alcohol-free spirits up 5 per cent.
Among the most popular choices from the chain in January were 12-packs of Corona 0.0%, with demand up by more than 250 per cent ,and 10-packs of Guinness 0.0, up by more than 100 per cent.
Tesco says the nation’s changing relationship with booze is seeing sales of alcohol-free drinks increase across every month of the year. It added that the increasing quality of low and no-alcohol alternatives was encouraging consumers to buy in multi-pack sizes rather than single bottles or cans.
Another trend giving momentum to alcohol-free range is "zebra stripping", when people alternate between alcoholic and non-alcoholic drinks on a celebratory night in order not to get too drunk.
In the words of Sarah Holland, a buyer at Waitrose, 2024 has certainly been the year of zebra striping, driven by the wonderful variety of delicious no and low which are available on the market now.
This comes weeks after IWSR data reported similar picture.
The firm stated that the total UK no and low market is expected to have more than doubled in 2024 versus 2023. Preliminary data shows no-alcohol beer grew 20 per cent in 2024 vs 2023 while alcohol-free beer now accounts for more than 2 per cent of total beverage alcohol market sales in the UK, highlighting just how big a part the subcategory is beginning to play in the overall drinks sector.
IWSR added that growth of no-alcohol spirits has slowed, but is expected to have grown +7 per cent in 2024 vs 2023 while sales of low-alcohol wine fell -5 per cent in 2024 vs 2023, no-alcohol wine grew by +8 per cent.