UK Retail Suffers Historic December Sales Collapse

UK retail experienced a deeply disappointing December, marking the worst monthly sales performance since November 2024, according to BDO’s latest High Street Sales Tracker. The report reveals a significant downturn, dashing hopes for a strong finish to 2025 for the sector.

Total like-for-like retail sales declined by 1.4% in December, and overall sales volumes during the crucial Golden Quarter (October-December) were substantially lower than the previous year. This downturn was felt across both brick-and-mortar stores and online channels, with in-store sales falling 0.5% and online sales dropping 0.6% compared to December 2024.

The fashion sector was particularly affected, experiencing a total like-for-like sales decrease of 2.3% in December, a stark contrast to the 8.8% growth seen in the same month the previous year. In-store fashion sales also saw a slight decline of 0.2% from a positive base of 1.5% a year prior. While the third week of December offered a glimmer of hope with 0.37% growth, fashion sales were largely negative throughout the month.

Non-store fashion sales presented a mixed picture, showing positive results in the first and third weeks of December but suffering substantial drops in the second and fourth weeks, down 9.41% and 4.04% respectively. However, the Golden Quarter as a whole saw December as the only negative month for fashion, buoyed by strong non-store sales, particularly in November.

Sophie Michael, Head of Retail and Wholesale at BDO, attributes the poor performance to a combination of factors. She notes that retailers were anticipating a strong end to the year after a challenging 2025, but instead witnessed a consistent downward trend. Economic uncertainty surrounding a late Budget, coupled with disappointing sales in October and November, contributed to the lackluster results.

Persistent food inflation and the broader high cost of living led consumers to prioritize spending on essential festive food, drinks, and experiences over discretionary purchases. Low consumer confidence and ongoing economic uncertainty further dampened spending. Michael warns that this situation raises significant concerns for retailers heading into 2026.

Retailers are now facing the challenge of managing leftover stock, but aggressive discounting could further erode already squeezed profit margins. The combination of weak sales and potential discounting pressures paints a challenging outlook for the UK retail sector in the coming year.