The UK's independent retail sector endured a grim 2024, with 11,341 store closures and 58,616 job losses, marking a significant increase compared to 2023, when 7,793 stores closed and 34,390 jobs were lost, according to the Centre for Retail Research.
This 45 per cent rise in store closures and a staggering 70 per cent jump in job losses highlight the growing challenges faced by smaller retailers, who have been disproportionately affected by economic pressures, rising costs, and intensifying competition. The sector's struggles contributed heavily to the overall retail closures and redundancies in 2024, which saw 13,479 stores shuttered and 169,395 jobs lost across the UK.
In contrast, the multiples sector, while also impacted, experienced a less dramatic year-on-year change. In 2024, multiples closed 2,138 stores and reported 74,784 job losses, compared to 2,701 closures and 45,428 job losses in 2023.
The figures paint a bleak picture for independent retail, which is often hailed as a cornerstone of local communities. Retailing jobs form a sizeable portion of the country’s overall job market, with 2.87 million roles representing about 8.5 per cent of all UK jobs, according to the most recent figures from the British Retail Consortium.
“The comparatively low [job loss] figures for 2023 now look like an anomaly, a pause for breath by many retailers after lockdowns if you like,” Professor Joshua Bamfield, director of the Centre for Retail Research, said.
“The problems of changed customer shopping habits, inflation, rising energy costs, rents and business rates have continued and forced many retailers to cut back even more strongly in 2024.”
Trade bodies have warned that small high street shops are likely to face significant challenges in 2025 due to tax hikes announced in the Autumn Budget, coupled with minimum wage changes. Businesses will see an increase in national insurance contributions and a reduction in business rate discounts next year.
The Centre for Retail Research forecasts 17,349 store closures in 2025, resulting in nearly 202,000 job losses.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020,” Bamfield warned.
Nearly half (46 per cent) of Brits prioritised spending on small, affordable, mood-boosting luxuries such as pastries and cosmetics in 2024 though most shoppers were bothered by "double-dip" shrinkflation majorly seen in snacks and chocolates, states a recent industry report, charting out top 10 trends that shaped consumer behaviour last year.
New data from Barclays reveals that essential spending grew just 0.9 per cent in 2024, down from 3.9 per cent last year, as spending on fuel fell while supermarket growth slowed.
The Barclays Consumer Spend report, which combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending, reveals the top 10 trends that shaped consumer behaviour this year.
'Spendanova' for experience-loving Brits
Brits prioritised spending on memorable experiences in 2024, with the entertainment sector enjoying a 5.8 per cent uplift. Those who spent on entertainment in 2024 each spent £343 on average.
Spending on live shows and concerts increased 6.7 per cent thanks to ticket sales and attendance at major musical events such as The Eras Tour, Sabrina Carpenter, Coldplay World Tour, and Oasis’s reunion.
Treatonomics and the ‘lipstick effect’
Cutbacks continued for countless consumers, but many adopted a “treat yourself” attitude in 2024. Nearly half (46 per cent) of Brits say they prioritise spending on small, affordable, mood-boosting luxuries such as pastries and cosmetics, even while tightening budgets.
Among this group, baked goods were a particularly popular ‘pick-me-up’, chosen by 43 per cent at an average monthly spend of £22 each, with crookies and pistachio desserts among the year’s top trending treats.
Demand for little luxuries also boosted pharmacy, health and beauty retailers, up 7.1 per cent, further demonstrating the impact of the "lipstick effect", where shoppers prioritise cosmetics purchases, even when limited spending. ‘Beauty spenders’ splashed out £291 each on average in 2024.
Double-dip shrinkflation
Shrinkflation emerged as one of supermarket shoppers’ top scourges in 2023, while this year saw ‘double-dip’ shrinkflation bite. Two thirds (64 per cent) of cost-conscious Brits noticed ‘double-dip’ shrinkflation in 2024, where products go through two or more rounds of size reductions without a corresponding drop in price.
According to this group, the five most cited products hit by ‘double-dip shrinkflation’ were chocolate (54 per cent), crisps (39 per cent), packs of biscuits (34 per cent), snack bars (32 per cent) and sweets (32 per cent).
Brits find creative ways to save
Consumer confidence in household finances showed tentative signs of recovery this year, reaching an average of 69 per cent, up from 64 per cent on average in 2023. Brits took control over their finances and embraced new ways to save; almost a quarter (23 per cent) say they have participated in or would consider participating in a “no-spend” challenge, which involves refraining from making non-essential purchases, such as takeaways, coffees and clothes.
Almost half (45 per cent) said they were cooking more at home to save money, while setting clearly defined spending goals (such as saving for a holiday or building an emergency fund) and planning expenses in advance also proved to be popular.
Television thrives
Demand for digital content soared in 2024, emerging as the year’s strongest performing category, up 13.2 per cent – nearly twice the 7.3 per cent increase seen in 2023.
“Streamflation”, the rising price of streaming subscriptions, also took effect; 59 % of Brits expressed concern about their digital subscriptions becoming more costly. Despite this, only 27% of those cutting down their discretionary spending said that they would reduce their spending on the category.
Brits continue to pull up a bar stool
Brits continued to flock to bars, pubs and clubs in 2024, as the sector recorded a modest 3.6 per cent year-on-year increase, fuelled by a summer of sport and a desire for festive socialising, with Brits that ventured to the pub spending £344 on average each throughout 2024. Growth at pubs outperformed restaurants in 2024, which were up just 1.7% in comparison, suggesting Brits opted for more casual, relaxed socialising in the last year.
Grocery Slowdown
Growth in supermarket spending slowed to 1.3 per cent, down from 6.5 per cent in 2023.
In a year of determined budgeting, cost-conscious shoppers continued to look out for loyalty scheme discounts and supermarket deals. Encouragingly, Barclays Consumer Confidence data found over a third (36 per cent) of shoppers have noticed food prices rising at a slower rate in recent months.
Easing pressure on household finances
There was welcome relief for households as concerns about inflation and the cost of energy bills both began to ease at the midway point of the year.
Brits take to the skies
Travel sector spending stayed strong in 2024, up 6.9 per cent, but lagged behind 2023, when growth reached 15.2 per cent. Holidaymakers spent £1,117 on average each on travel, and travel agents (7.9 per cent) and airlines (7.5 per cent) both saw significant uplifts in the period.
Homeowners choose sustainability over style
Spending on home improvements & DIY dropped -7.3 per cent year-on-year, while furniture stores also recorded a -2.2 per cent fall, indicating that Brits have been making fewer home décor purchases, instead favouring experience-led categories.
Whilst energy bills remained below 2023 levels, the energy price cap rise and colder weather kept home heating on the agenda. A quarter of homeowners reported making energy efficiency improvements to their home in 2024. Of those making changes, over half (52 per cent) are seeking to reduce long-term energy use and a fifth hope to increase the value of their property.
Karen Johnson, head of retail at Barclays, said, “2024 demonstrated Brits’ strong appetite for experiences very clearly, spending selectively elsewhere in order to find room in their budgets for the moments and treats that the most matter to them.
“From The Eras Tour to the much-anticipated Oasis reunion; blockbusters at the cinema to quality content on the couch; pastries to lipsticks and planning trips abroad, Brits collectively said ‘yes’ to joy in their spending, even against a backdrop of rising bills and living costs.
“This conscious consumerism will continue to shape spending in the new year, with entertainment likely to maintain its momentum, as Brits continue to embrace their ‘new essentials’.”
A significant proportion of shoppers are expected to shop in person during the Boxing Day sales in a considerable rise from last year, shows a recent research.
According to a research by Barclays, Brits this year are likely to are expected to splurge £4.6 billion with each shoppers poised to spend £236 during the Boxing Day sales, suggesting consumers will be actively participating in the post-Christmas sales.
These figures are down slightly on those reported in 2023, when shoppers spent £4.7 billion during the Boxing Day sales — about £100 million more than this year. The average shopper is forecast to spend £18 less than in 2023.
However, each shopper is still expected to spend £50 more than in 2019, before the pandemic.
Researchers said that while some of this growth “will be down to inflation”, some of it can be explained by a “continued desire to use the post-Christmas sales to seek out value for money”.
More than a quarter of the British public are expected to shop in person during the Boxing Day sales, up from 15 per cent in 2023.
While some bricks-and-mortar retailers have confirmed that they will not open on Boxing Day, 26 per cent of those who plan to shop in the post-Christmas sales say they will spend the majority of their money in-store.
This is driven by a preference to see and touch items before purchasing (41 per cent) and the enjoyment of socialising while shopping (32 per cent).
High streets (33 per cent) and shopping centres (32 per cent) are the most popular destinations. Meanwhile, 17 per cent cite wanting to support their local high street, and a further 15 per cent plan to shop with independent small businesses.
A third of Britons (34 per cent) say they’d be more inclined to spend at brick-and-mortar retailers if they were offered discount codes that can only be redeemed in-store, or if they were given a free item with in-store purchases (27 per cent).
Men are expected to spend £53 more than women during the sales.
The research also showed that 24 per cent of the public “will only be buying what they consider essential items in the post-Christmas sales”.
Retailers could find themselves facing a New Year spending squeeze as public confidence in the state of the economy took a nosedive, show recent industry data.
According to BRC-Opinium data released today (23), consumer expectations over the next three months of their personal financial situation remained at -3 in December, the same as in November.
Confidence in state of the economy worsened to -27 in December, down from -19 in November. Confidence on personal spending on retail also fell while confidence in personal spending overall dropped to +11 in December, down from +17 in November.
Helen Dickinson, Chief Executive of the British Retail Consortium, said,“Public confidence in the state of the economy took a nosedive, falling 8pts to -27.
"This created a widening gap between expectations of the economy and of people’s own finances, which remained unchanged. Perceptions were heavily skewed by age, with 18 to 35 year olds considerably more upbeat than older generations on both questions.
"The public’s spending intentions – both in retail and beyond – dropped 6pts, with expectations of spending in nearly every retail category falling. If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales.
“The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7bn of new costs from the Budget set to hit the industry in 2025."
Dickinson added that with sales growth unable to keep pace, retailers will have no choice but to raise prices or cut costs – closing stores and freezing recruitment.
"To mitigate the impact this will have on growth, Government must ensure that its proposed business rates reform does not result in any shops paying higher rates than they already do," she said.
Grocers must focus on their price positioning to remain competitive as food and grocery spending in UK convenience stores is projected to outpace the hypermarkets, supermarkets, and discounters channel.
According to GlobalData, food and grocery spending in convenience stores is projected to reach £43.2 billion by 2028, growing at a compound annual growth rate (CAGR) of 2.0 per cent between 2024 and 2028.
Between 2023 and 2024, the traditional big four grocers, Tesco, Sainsbury’s, ASDA, and Morrisons, collectively added 800 new convenience stores to their portfolios, with ASDA and Morrisons leading the growth with acquisitions. This rapid expansion underscores increasing competition in the convenience market.
After successfully focusing on price in large format stores to appeal to consumers during the cost-of-living crisis, grocers must shift their focus on agile pricing to convenience locations.
Sainsbury’s and Tesco are notable examples within convenience, with Sainsbury's recently introducing Aldi price matching in its Local stores and Tesco announcing price reductions on over 200 products in its Express stores.
Aliyah Siddika, Retail Analyst at GlobalData, comments, “This replication of price focus from larger format stores to grocers’ expanding their convenience offer will encourage consumers to impulse buy due to increased affordability.
"The shift in UK consumer behaviour towards frequent top-up shopping has also created substantial growth potential in the convenience market.”
Before the pandemic, 81.6 per cent of UK consumers stated they would visit a grocer on the way home from work, and 78.4 per cent reported the same now.
Budget limitations have primarily driven this change, followed by the rise of hybrid working. Pre-pandemic, consumers working in the office full-time had less time to cook dinner after work.
However, with the shift to hybrid work models, consumers now go into the office a few times a week and are more likely to have the time to prepare meals ahead of the days they are in the office to save money.
Convenience retailers should promote low prices on their fakeaway options to entice consumers to visit on their way home from work for an affordable yet indulgent meal.
Siddika concludes,“When offering deeper price cuts in convenience formats, grocers must target price promotions towards items that consumers are more inclined to purchase during the workweek. Such as food-to-go ranges, ready meals, quick dinners, and treats to capture spending from commuters."
Sales of fresh meat and poultry have soared as shoppers cut back on takeaways and eating out – but they are increasingly shunning so-called ‘meat-free’ options.
NIQ data released today (14) shows that over the last 12 months, British consumers did more scratch cooking, with sales of fresh meat (+£481.3m), fresh fruit (+£463.5m), fresh vegetables (+£374m), fresh salad (+£285.3m) and fresh poultry (+£247.6m) all among the top 10 fastest growing categories.
In a further sign that more meals are being freshly prepared, dried herbs and spices enjoyed the biggest volume percentage gains out of all the 127 categories in this year’s report.
Sales of beef (+£242.1m) and chicken (+£212m) were among the most popular and fastest growing products in British supermarket baskets in 2024, but lamb and duck also enjoyed strong growth.
But the meat-free category (-£37.1m) continues to decline, dipping below £500m in value. Market leader Quorn (-£16.5m) was the biggest casualty, although some brands are still in growth.
Inflation
The NIQ data also shows that UK shoppers have cut back on some dairy products, with milk (-£223.3m) and butter, spreads & margarine (-£63.7m) among the fastest falling categories, as the massive inflation in these categories over the past two years has taken its toll.
With inflation now largely under control in grocery retail, the reintroduction of branded promotions has helped stem the slump in overall branded volumes. But inflation is still having a material impact on the market.
A less obvious casualty is chocolate confectionery (+£532.6m), which actually recorded the biggest increase in value sales across the Top Products Survey. But volumes fell and most of the value gains reflect price hikes linked to soaring cocoa commodity prices, as cocoa beans futures reached an all-time high of $12,000/tonne earlier this year.
It was a similar story for Cadbury Dairy Milk (+£72.4m), where the leading chocolate brand’s strong value sales again masked lower volumes.
The cost of living crisis is likely also to blame for the decline in sales in many alcoholic drinks categories, although the government’s duty hikes have also played a part. Spirits (-£52.6m), sparkling wine (-£19.9m) and champagne (-£12.1m) all fared badly. And alcohol brands accounted for 50% of the top 10 fastest falling products, including lager brands Foster’s (-£34m) and Carling (-£22.2m) as well as the UK’s leading gin brand Gordon’s (-£21.4m).
Sales of wine (+£242.4m) performed better, although Hardys (-£41m), and Blossom Hill (-£22.7m) were some of the biggest losers overall in terms of value sales.
It was a different story in energy drinks.
Monster (+£103.6m) and Red Bull (+£84.7m) were the strongest performing brands in terms of value sales. But after enjoying stratospheric growth, following its social-media fuelled launch, sales of Prime (-£63.1m) came crashing down to earth.
The biggest overall casualty, however, was disposable vaping brand ElfBar (-£284m), amid signs that the vaping category may have passed its peak ahead of duty hikes and increased legislative restrictions. On the other hand the overall fastest growing product was SKE Crystal Bar (+£240.8m) which shows how prone to fast-moving fads the vaping category is.
The fortunes of the wrapped bread market were also highly variable. Hovis (-£37.7m) experienced the biggest downturn in sales of any food brand; while Warburtons (+£57.6m) was the biggest food brand to be in value and volume growth.
Fastest-growing grocery categories of 2024
Category
Actual growth (£ millions) in value sales
1
Chocolate
£532.6m
2
Fresh Meat
£481.3m
3
Fresh Fruit
£463.5m
4
Fresh Veg
£374m
5
Fresh Salad
£285.3m
6
Crisps & Snacks
£247.6m
7
Fresh Poultry
£247.6m
8
Eggs
£246m
9
Light Wine
£242.4m
10
Sweet Biscuits
£238.9m
Fastest-falling grocery categories of 2024
Category
Actual decline (£ millions) in value sales
1
Milk
-£223.3m
2
Toilet Tissue
-£106.2m
3
Butter, Spreads & Marge
-£63.7m
4
Spirits
-£52.6m
5
Meat-Free
-£37.1m
6
Frozen Fish
-£21.3m
7
Sparkling Wine
-£19.9m
8
Kitchen Roll
-£12.9m
9
Champagne
-£12.1m
10
Dry Pasta
-£6.8m
Rachel White, Managing Director UK & Ireland at NIQ, said, “Shopping habits have changed once again. What we are seeing in this year’s survey is a return to scratch cooking and the preparation of fresh meals.
"Perhaps this is a nod to trends in healthier living – with consumers taking the time to prepare meals together, sourcing fresh and healthy products and consuming less alcohol – but it’s also a product of the cost of living crisis, as shoppers cut back on takeaways and eating out to save money.”