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UK retail sales fall in December as Christmas boost fails

Jan 8, 2026 United Kingdom

BDO’s latest High Street Sales Tracker shows that discretionary retail sales fell by 1.4% year-on-year in December, representing the weakest monthly performance since November 2024

“After a challenging year, retailers were very much hoping for a strong end to 2025. Instead, we’ve seen a downward trend since early in the year and the worst monthly performance since November 2024”, Sophie Michael, head of retail and wholesale at BDO, commented.

The data also reveals that in-store sales fell by 0.5% and online sales by 0.6%, as compared to December 2024, with volumes declining across all channels.

According to the accounting and advisory firm, this follows the weak results seen in October and November, when high street sales failed to keep pace with inflation. This left volumes across the Golden Quarter significantly below last year’s levels.

“With a late Budget bringing economic uncertainty, the sector saw a disappointing October and November. Retailers were expecting some of the lost sales to be made up in the final weeks leading to Christmas, but December failed to generate some much-needed festive cheer”, Sophie Michael added.

The head of retail and wholesale at BDO noted that, during that period, consumers prioritised essentials and experiences due to low confidence caused by persistent food inflation and high living costs. Consequently, retailers are now under pressure to reduce excess stock, while facing rising costs announced in previous Budgets.

“This leaves little cause for optimism for this year, but despite the hurdles the sector has historically faced, resilience prevails. Once again, 2026 will see retailers having to continue to adapt and find new ways to attract customers to loosen the purse strings”, she concluded.

Image Credits: retailrewired.co.uk

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