Total like-for-like retail sales across discretionary spending categories fell by 1.4% in December compared with the same month last year, marking the weakest monthly performance since November 2024.
Figures from the High Street Sales Tracker by accountancy and business advisory firm BDO showed in-store sales fell by 0.5%, while online sales declined by 0.6% over the period.
The December figures followed weak trading in October and November, meaning sales volumes across the so-called Golden Quarter were significantly lower than a year earlier.
Sophie Michael, head of retail and wholesale at BDO, said the sector had been hoping for a stronger end to the year after a difficult 2025 but instead recorded a sustained downturn.
She said: “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 deliver.”
Michael noted consumers had reduced discretionary spending over the Christmas period because of “persistent food inflation and high living costs, instead prioritising spending on food, drink and experiences”.
She added that low consumer confidence and continued economic uncertainty had further weighed on demand, creating additional challenges for retailers entering 2026.
Michael concluded: “Many retailers will still have significant volumes of leftover stock, but heavy discounting risks further squeezing already tight margins.With balance sheets under pressure after a poor Christmas and higher cost bases announced in previous Budgets, it will be difficult to invest in new product lines.”
