In a surprising turn of events, UK retail sales experienced an unexpected rebound during the crucial Christmas trading period last month, according to newly released official statistics. The Office for National Statistics (ONS) has reported that the total volume of retail sales, which measures the quantity of goods purchased, is estimated to have increased by 0.4% in December. This positive performance comes after a disappointing decline of 0.1% recorded in November, defying most economic forecasts that had anticipated flat sales for the festive month.
Online Trading Provides Significant Boost
The December recovery was significantly bolstered by a remarkable surge in online trading activity. Sales across internet retailers jumped by an impressive 4.4% during the month, marking the most substantial increase since February of the previous year. This digital resurgence was particularly driven by heightened consumer demand for gold and silver jewellery, which helped to reverse a previous lull experienced in November. The strong performance of online jewellers contributed substantially to the overall retail figures, indicating shifting consumer preferences during the festive season.
Annual Performance and Quarterly Challenges
Despite the December uplift, the broader picture reveals more complex challenges for the retail sector. The ONS confirmed that the December increase was insufficient to offset earlier declines of 0.8% and 0.1% in October and November respectively. Consequently, retail sales by volume actually decreased by 0.3% during the all-important final quarter of the year. However, on an annual basis, the figures showed more positive momentum with sales volumes rising by 1.3% throughout 2025, representing the most significant annual increase since 2021.
ONS senior statistician Hannah Finselbach commented on the mixed results, stating: "Sales were up in December, with internet retailing performing particularly well. Within this sector, online jewellers experienced a strong month and reported higher demand for gold and silver items. Looking at 2025 as a whole, retail sales achieved a second consecutive annual rise following the substantial declines of 2022 and 2023, although volumes still remain below their pre-pandemic levels."
Sector Performance Diverges Significantly
The detailed breakdown of the figures reveals a stark contrast between different retail sectors. Supermarkets recorded a modest 0.2% month-on-month increase in sales during December, benefiting from competitive pricing strategies that characterised the festive period. In sharp contrast, non-food stores endured a difficult Christmas season with sales dropping by 0.9%, representing their worst performance since May of the previous year.
This sectoral divergence was particularly evident in clothing and footwear, which experienced a 0.7% decline in December sales. The pattern aligns with recent reports from major supermarket chains and high street retailers, which have indicated buoyant food sales during the festive period but significantly more challenging trading conditions for general merchandise and clothing categories.
Consumer Behaviour and Economic Context
Many retail industry leaders have highlighted how consumer uncertainty ahead of the November 26 budget negatively impacted trading during October and November. Jacqueline Windsor, head of retail at PwC UK, explained: "The final quarter of the year, when retailers traditionally generate the majority of their revenue, proved disappointing. It has become evident that consumers exercised restraint in their spending during the run-up to Christmas. Even as budget uncertainty diminished, shoppers did not purchase as much as retailers had anticipated, due to factors including the later commencement of Christmas shopping and higher grocery price inflation forcing consumers to redirect their spending from discretionary categories toward essential items."
Future Outlook and Economic Indicators
Separate economic indicators released on Friday provide some optimism for continued recovery in consumer spending. GfK's consumer confidence report showed a slight improvement in readings, suggesting household resilience may be strengthening. Economic analysts point to several factors that could support retail recovery throughout 2026.
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, offered a cautiously optimistic perspective: "We anticipate that consumer spending should continue to recover in 2026 as policy uncertainty gradually eases, inflation continues to fall, and the Monetary Policy Committee implements expected interest rate reductions in April. These combined factors should help to bolster shopper confidence and spending capacity over the coming year."
The December retail figures therefore present a complex narrative of unexpected festive resilience amid broader quarterly challenges, with online trading emerging as a particularly bright spot in an otherwise mixed performance across different retail sectors.
