Christmas Trading Review 2024: A strong finish to a challenging year
Christmas 2024 in the UK brought a blend of cautious optimism and steady growth for much of the retail sector. While the economic climate remained challenging due to ongoing cost-of-living pressures, the festive period delivered stronger than expected for many businesses, driven by early discounting, experiential shopping and the growing demand for sustainability, value and quality.
Christmas 2024 Sales Performance:
General reporting from many retailers shows Christmas trading performance for 2024 was strong and achieved a growth on last year. This was mainly driven by early spending, strong performance within key sectors and customers behaviour demonstrating the importance of quality over quantity.
Supermarkets:
Aldi reported their best Christmas to date with consumers shopping earlier than ever, buying Christmas puddings and cakes as early as September, with strong demand for their premium products.
Lidl reported a record breaking trading period over Christmas with Tesco announcing its best Christmas ever with like for like sales increasing by +4.1% in the UK and +4.8% in the Republic of Ireland. Again, following the festive trend for quality, Tesco reported that their ‘Finest Range’ and ‘Chef’s collection’ was in popular demand. Sainsburys also announced their 'biggest ever Christmas’ with sales up +3.8% (in the six weeks up until 4th January). Unlike Aldi, Sainsbury’s claimed that consumers shopped later on this Christmas with record sales in the days running up to Christmas. However, in line with other supermarkets, Sainsbury’s announced that their ‘Taste the Difference’ premium range was also sought after by customers, achieving growth of +16%.
When looking at value for both retailers and consumers, Morrisons expanded its price match with Aldi and Lidi, and Asda price dropped thousands of products. This suggests that both Morrisons and Asda recognised the significance of value for the consumer and had to implement changes to remain competitive.
Marks & Spencer was no different with their Christmas performance as they announced a ‘good’ Christmas as food sales increased by +8.7%, and their value range increased by +14% in the same period.
It’s apparent that when reviewing the supermarket sector, that Christmas performance was strong and there was a real appetite for quality, value and service by consumers. Retailers recognised this, and subsequently planned and delivered to achieve their positive results.
Other Retailers:
Many other retailers announced strong trading performance over Christmas including retails such as Next, The Cotswolds Company and Card Factory.
Next sales exceeded expectations in the run-up to Christmas with full price sales up +6% compared to the projected +3.5%. The Cotswold Company also announced a +22% increase in sales with e-commerce growing +13% year on year and a surge in showroom footfall by +66%. Card Factory also announced an uplift of revenue by +4.7% in November and December, again with a focus on quality and value, driven predominantly by an additional 32 new store openings.
Whist other retailers such as Boots, Barbour, ProCook, Greggs, Dunelm, Curry’s, White Stuff, Topps Tiles, Very UK and The Fragrance Shop all announced a strong trading period, this was not the case for all retailers.
JD Sports, Shoe Zone and Poundland all announced a tough trading performance this Christmas putting this down to ‘challenging market conditions’. This was driven mainly due to increased promotional activity from competitors and weak clothing and general merchandise playing a part.
Online v High-Street:
According to data from the British Retail Consortium (BRC) and analysts at Sensormatic, footfall at UK shopping centres, retail parks and high streets were down 2.2% in December compared to the same period in 2023.
While footfall data is only one of many platforms to measure performance, this suggests that footfall continues to be a challenge and additional trade performance information is advised to provide a full and detailed analysis.
Inclement weather possibly played a part as many festive events were cancelled as a result of Storm Darragh in early December.
When reviewing online sales side by side with bricks and mortar, EVRI announced they delivered ‘record parcel volumes’ in the peak Christmas trading period. Their biggest period was the week following black Friday where 24.7 million parcels were delivered, an increase of +20.8% compared to 2023. They also announced their best Christmas yet, delivering a record breaking 173 parcels in the 9 weeks leading to 28th December 2024, which saw an increase of +12% on the previous year.
This strongly implies that online shopping performed better than expected due to strong demand.
The outlook for 2025:
According to Centre for Retail Research, it is estimated that 17,350 stores will close in 2025 as high national insurance contributions and national living wage increases take effect from April.
However, despite these very gloom statistics (which are only estimations at this point) there are lots of positive activity planned for the high streets in 2025. According to Retail Gazette the below shares only some of the retailers expanding their high-street presence in 2025:
1. The Range: to open 10 new superstores each month in 2025, converting 70 homebase sites.
2. Co-op: to open another 75 new supermarkets which will include 25 new Co-op operated locations. They also plan to refurbish a proportion of their existing units.
3. Holland & Barret: plan to open a further 50 stores. In 2024, they spent £70 million refurbishing 280 stores and opened 35 new sites. They also plan to expand their ‘shops in shops’ offer with Tesco and launching a partnership with Next.
4. Waterstones: plan to open 12 new stores.
5. B&Q: look to open more local format stores.
6. Aldi: will be investing a further £650 million into its store estates and aims to hold 1,500 stores in the UK, with 30 new stores opening this year.
7. Lidi: plan to open 40 new stores this year, aiming to have an estate of 1,100 stores.
8. Gymshark: will open 3 more units this year.
9. Jo Malone: plan to open 8 new stores in 2025, targeting market towns.
10. Sephora: to open 20 new stores across the UK.
11. Sainsbury’s: will open 20 new superstores and around 25 convenience stores over the next 15 months.
12. B&M: looking to open 45 new stores, aiming to have an estate portfolio of 1,200 stores across the UK.
This is a positive picture which not only shows confidence, but demonstrates that retailers view these as vital community and brand-building environments, supporting the view that physical and online commerce can coexist and thrive together.
Conclusion:
Christmas 2024 proved that UK retail remains resilient in the face of adversity. Retailers who invested in quality, service and value performed well, and those who delved deeper into innovation, sustainability and personalisation reaped the rewards, even amid economic uncertainty.
As we start 2025, we remain ‘cautiously optimistic’ as many businesses look to grow and expand into the high-street despite economic uncertainty. Retailers will need to continue to be creative and adapt to the financial pressures upon them. Expanding connections and meeting the needs of their evolving customers’ expectations will always be a priority, not only for retailers, but for the support network around them.
Until next time,
Medi