retail christmas 2025: what to expect when shoppers come to town
As the festive season approaches, retailers are already looking back at 2024 with mixed feelings.
The reality is that last year’s “Golden Quarter” wasn’t all that golden: total UK retail sales rose just 0.7% year on year, and Christmas only added 0.4%. December itself looked brighter with 3.2% growth, but footfall fell by 2.5%. Bad weather and cost-of-living concerns meant fewer people on the streets.
Online, however, the story was different. Non-food sales surged 11.1% in December, driving online penetration to nearly 39.6%. Mobile was the channel of choice, accounting for more than half of holiday purchases. Even traditional players benefited: click-and-collect orders at M&S were reportedly up 20%.
There were also clear sector winners. Grocery chains outperformed with average sales growth of 5.1%. Food and beverage spending rose 8.4% as households gathered to celebrate, while health and beauty spend climbed nearly 3% – with Barclaycard reporting a 7% quarterly lift. Fashion, however, struggled with declining footfall and only regained momentum through online surges.
okay – so what about this Christmas?
Forecasts for 2025 suggest cautious optimism. KPMG expects consumer spending to grow by 1.8%. But with retail sales growth predicted at just 1.2% – below projected shop price inflation, margins will stay tight. Deloitte notes that inflation is easing and interest rates are softening, but PwC warns that “sticker shock” will keep growth subdued.
Technology will shape the season. A 2024 study found that 95% of UK consumers are open to using AI tools to help select gifts. For retailers, this is no longer a test-and-learn experiment: when it comes to meeting consumer expectations – and staying relevant in the market place – it's now a commercial necessity.
how can retailers prepare?
Plan early and flex logistics – anticipate demand swings, secure stock, and build in agility.
Tighten omnichannel cohesion – connect the dots between mobile, online, in-store, and social commerce.
Invest in intelligent tech – AI-driven forecasting, dynamic pricing, and fast-response chatbots (67% of UK shoppers expect a response within two hours).
Stay sustainable and people-focused – from eco-packaging to well-trained (upskilled) seasonal staff.
And finally, a reminder: while Santa’s sleigh may now be AI-assisted and technically driverless, UK shoppers still hate queues, love a bargain, and want a seamless experience overall.