
Despite a number of headwinds, Christmas 2024 appeared to be one for the record books as the likes of M&S, Tesco, Sainsbury’s and The Cotswold Company celebrated bumper golden quarters.
Outside of a lacklustre performance from struggling supermarket chain Asda, grocery stood out as an overall winner across retail.
M&S boss Stuart Machin boasted it’s “our job to break records” as the high street giant’s festive sales topped £4bn for the first time.
Kantar crowned Tesco and Sainsbury’s the joint winners of Christmas, as the pair snapped up the most market share across the grocery sector.
Even Superdrug, The Perfume Shop and Currys carried its positive momentum from the year into the golden quarter.
However, it wasn’t all good news as trading across fashion particularly struggled.
JD Sports downgraded its full-year profit guidance due to tougher-than-expected market conditions and increased promotional activity during the peak trading period.
Struggling fashion retailer Quiz’s woes worsened as “disappointing level of revenues” in the run up to Christmas – sales down 7.5% to £39.1m – meant the business exited its peak in a weaker position than anticipated.
Even Primark, a perennial over-performer in the fashion sector, reported subdued Christmas trading as like-for-like sales in its UK and Ireland stores dropped 6% for the 16 weeks to January 4, down from a 2.1% rise last year.
Sosandar’s growth slowed, as sales fell 14.6% to £12.2m for the three months ending 31 December, down from £14.3m last year.
Fashion’s subdued Autumn was a stark contrast to the world of beauty, with Superdrug toasting to its “best Christmas ever” as like-for-like sales jumped 5.1% in the four weeks to 30 December.
Rival Boots reported a record-breaking performance during Black Friday, which helped to boost total retail sales 8.1% for the three months to 30 November.
But beyond retail’s winners and losers, what were some of the trends that defined golden quarter trading in 2024?
What defined Christmas 2024?
Time to celebrate
Shoppers loosened their purse strings over Christmas in light of easing inflation, with many seeking out little luxuries.
Tesco boss Ken Murphy said customers were “willing to trade up” as it saw a 15.5% sales growth in its premium Finest offer.
Over 20 million customers shopped the supermarket’s range over the period, with the UK’s biggest grocer selling more than 1.4 million bottles of its Finest prosecco and over 18 million premium pigs in blankets.
Similarly, Sainsbury’s found that over half its big basket shops contained at least one product from its Taste the Difference line.
Next reported a “better than expected” festive quarter, with sales via its Label third-party platform up 9.2%, while M&S reported a 2.6% uptick in underlying sales for its women’s and menswear categories.
Chief executive Stuart Machin said the retailer’s “improved style credentials supported growth” across its clothing department, with party wear velvet sales the standout for its women’s collection and “the return of the tux” contributing to a 20% boost in men’s suiting sales.
Card Factory attributed its 4.7% uptick in sales in November and December to a higher average basket value, supported by expanded product ranges and strong sales of gift and celebration items.
Late Christmas shoppers
There was a notable trend of consumers leaving their shopping to the last minute, which led to a surge in sales in the final days leading up to the 25th.
Next boss Lord Wolfson stated “Christmas came late” for the retail bellwether, adding that “it felt like the last couple of weeks made up for some softer two or three weeks before that”.
The Perfume Shop experienced a “significant last-minute rush,” with online sales of gift sets soaring 54% year-on-year in the final week before Christmas. It’s tie-up with Deliveroo accounted for £100,000 in sales.
Similarly, Tesco’s rapid delivery service Whoosh took 1.2 million orders over the peak and its main website reported its “biggest ever week” during the run up to the big day. The supermarket also recorded a “record-breaking” number of transactions from 12pm to 1pm on Christmas Eve.
Switching to online
Brick-and-mortar stores took a bit of a backseat this year as consumers shopped online for their gifts and groceries.
Kantar head of retail and consumer insight Fraser McKevitt notes that “more people chose to do some of their Christmas grocery shopping online this year with 5.6 million households opting for delivery or click and collect services on at least one occasion” as online spending topped £1.6bn.
It wasn’t just grocery that recorded this change, with Next’s Lord Wolfson reporting the business “saw a bigger shift online over the Christmas period than we’d seen for the rest of the year”. This may have also been a factor in bricks-and-mortar focused Primark’s festive sales decline.
Next’s online performance outperformed its retail stores, with revenue via its website increasing 6.1% in the nine weeks to 28 December, compared to a 2.1% dip in brick-and-mortar sales.
Meanwhile, Currys boss Alex Baldock said customers were shopping “through a mix of stores and online”. The electricals chain’s click and collect sales were up 13% and online-in-store sales jumped 24% in the 10 weeks to 4 January.
To discount or to not discount?
The sector was divided on who won by sticking to their full-price stance, and who lost out as savvy shoppers weighed up quality and value.
There are those like M&S, which delivered resilient Christmas trading (up 1.9% year-on-year across clothing beauty and home on a like-for-like basis) while driving full-price sell through.
By contrast, JD Sports delivered a 1.5% fall in like-for-like sales across November and December, which it attributed in part to its refusal to engage in discounting amid “a more promotional environment in the period than we anticipated.”
There was a similar story for the grocers, as data from NIQ shows that over a quarter (27%) of all FMCG sales in the final three weeks before Christmas were purchased on promotions. Although 2024 was a bumper year for festive sales in grocery, this was buoyed significantly by the highest level of promotions recorded across the sector in three years.
What does this all mean for retail in 2025?
Peel Hunt analyst John Stevenson says autumn trading “started pretty well” but that it “dropped away” coming into October as retailers and consumers processed the announcements made in the budget.
He notes that subdued confidence persisted through November and peak trading “took off from Black Friday”, which coincided with pay day weekend last year.
While things started to look up over Christmas, Tesco’s Murphy says January has proven to be “intensely competitive” in the grocery sector as consumers “tighten their pockets” post-Christmas period.
The supermarket chief said it was “working very hard to earn the basket” this month as “the whole customer sentiment tightens up”.
Murphy’s warning is echoed across the rest of the industry, with Next warning that its growth in the UK is “likely to slow” in the coming months as the impact of upcoming tax rises filter through the economy.
Stevenson warns that it’ll be “a tough first quarter as we find out what sort of shape the consumer in and how people come out after Christmas”.
Consumer confidence has plunged to new lows, according to the British Retail Consortium, with half of shoppers expecting the situation to worsen and only one-in-six predicting an improvement in the nation’s growth.
Despite the doom and gloom, Stevenson argues there are some green shoots that situations are improving as big ticket spending picks up.
He flags that electricals and furniture saw “decent growth” in the run up to Christmas, showing that “there is a capability to spend more” even if there “isn’t a willingness to spend it”.
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