General Insight on Retail Sales in December 2024

Retail sales data for December 2024 reveals a complex narrative of consumer behaviour and sectoral performance during a critical period that includes Black Friday and the holiday season. Here are the key insights:

  1. Overall Decline in Monthly Retail Sales Volumes:
    Retail sales volumes fell by 0.3% in December 2024, indicating subdued consumer demand during the festive period. This decline followed a modest increase of 0.1% in November, revised downward from 0.2%. Despite the dip, the annual comparison shows a 3.6% increase from December 2023, driven by a significant recovery from last year’s weaker performance.
  2. Food Stores Under Pressure:
    Sales volumes in food stores dropped by 1.9% in December, marking the lowest index level since April 2013. Supermarkets and specialist food stores, including butchers and bakers, saw weaker-than-expected performance, indicating cost-of-living pressures or shifting consumer spending patterns.
  3. Clothing Retailers and Non-Food Stores Rebound:
    Non-food stores, particularly clothing retailers, exhibited a notable recovery with a 4.4% increase in sales volumes. This rebound offset some declines in other categories, reflecting strong Christmas shopping and potential pent-up demand after prior months of falling sales.
  4. Impact of Black Friday and Seasonality Adjustments:
    The timing of Black Friday, which fell within December’s reporting period, and early promotional sales significantly influenced the data. Non-seasonally adjusted figures show a dramatic 10.0% rise in sales over the month, but these effects were moderated by seasonal adjustments.
  5. Online Retail Growth:
    Online sales values rose by 1.5% in December 2024, the first monthly increase since September. This growth brought online sales to 27.0% of total retail sales, up from 26.5% in November, underscoring the continued shift towards e-commerce.
  6. Quarterly and Annual Trends:
    Retail sales volumes fell by 0.8% in Quarter 4 compared to Quarter 3, indicating a broader weakening in consumer spending. However, the annual data reveals a 0.7% rise in sales volumes in 2024, marking the first annual growth since 2021, albeit not yet returning to pre-pandemic levels.

Conclusion

The December 2024 retail sales data highlights a mixed performance across sectors and a broader context of recovery and challenges in consumer spending. While the festive period traditionally drives retail sales, the modest monthly decline and quarterly contraction suggest that high inflation, economic uncertainties, and shifts in consumer behaviour continue to weigh on the retail sector.

  1. Sectoral Divergence:
    The disparity between food stores and non-food stores underscores changing consumer priorities. Essentials like food experienced weaker sales, possibly reflecting financial strain, while discretionary spending in clothing and household goods benefited from holiday shopping.
  2. Resilience of E-commerce:
    The sustained growth in online sales demonstrates the enduring appeal of digital retail channels, further cemented by convenience and early promotional campaigns. Retailers must continue to innovate in their e-commerce strategies to capture this market.
  3. Black Friday’s Expanding Influence:
    The shift of Black Friday promotions into December and the extension of sales windows have altered traditional seasonal patterns, requiring retailers and analysts to adapt to these changes in consumer shopping habits.
  4. Gradual Recovery in Annual Sales:
    Although annual retail sales volumes rose for the first time in three years, they remain below 2022 levels. This suggests a long road to full recovery for the sector, influenced by ongoing economic headwinds.

Retailers should leverage these insights to refine their strategies, focusing on value-driven offerings, enhancing online shopping experiences, and capitalising on seasonal sales trends. Policymakers and industry leaders must also address underlying economic challenges to foster sustainable growth in the retail sector.

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