Retailers warned of price hikes, store closures in 2025

Retailers across Britain have warned of potential price increases and store closures following a bleak Christmas trading period, as consumers grapple with relentless cost-of-living pressures.

Fresh data from Rendle Intelligence and Insights paints a challenging picture for UK retail in the lead-up to Christmas. Footfall in the final full week of trading was down by a significant 11.4 per cent compared to the same period last year.

“Super Saturday,” traditionally the year's busiest shopping day, offered little relief.

Footfall on the day was only 4.1 per cent higher than the previous Saturday and a mere 0.9 per cent higher than the equivalent day in 2023.

These lukewarm figures follow a Black Friday that saw a modest 5.5 per cent uplift in footfall year-on-year, as shoppers appeared to prioritise discounted deals over last-minute festive spending.

Diane Wehrle, CEO of Rendle, highlighted the stark reality, “The disappointing results, coinciding with news that the UK economy showed no growth between July and September, underscore the severe cost pressures faced by households amid prolonged high inflation.

“It appears this Christmas has been disastrous for retail, and a bad omen for 2025.”

Official data also showed that retail sales in the UK fell short of expectations in November despite shops starting to cut prices early as part of Black Friday discounting.

Sales volumes rose by a weaker-than-expected 0.2 per cent month-on-month in November, having fallen by 0.7 per cent in October, new data from the Office for National Statistics shows.

Early retail sales data for December showed little sign of improvement.

Meanwhile, retailers body British Retail Consortium (BRC) has also warned of “spending squeeze” in January 2025.

BRC-Opinium figures released on Monday (23) suggest that public confidence in the state of the economy nosedived in December, falling eight points to minus 27.

The public’s spending intentions, both in retail and beyond, dropped six points, with expectations of spending in nearly every retail category falling.

Helen Dickinson, the BRC’s chief executive, stated, "The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7 billion of new costs from the budget set to hit the industry in 2025.

“With sales growth unable to keep pace, retailers will have no choice but to raise prices or cut costs, closing stores and freezing recruitment.”