Commenting on the Office of National Statistics retail sales index for January 2026, Jacqueline Windsor, Head of Retail at PwC UK, said:
“After two consecutive months of month-on-month decline, seasonally adjusted retail sales volumes excluding petrol ticked up in December by 0.3% compared with November – or the equivalent of 0.6% more pounds in the till.
“However, the final quarter of the year when retailers traditionally make most of their money was a disappointment, with sales volumes falling by 0.3% and retailers unable to make up for the ground they lost in October and November, admittedly against the backdrop of stronger sales at the end of summer.
“It’s now clear that consumers held back in the run-up to Christmas. Even as Budget uncertainty dissipated, shoppers did not buy as much as retailers hoped, due to the later start to Christmas shopping and factors such as higher grocery price inflation meaning they had to divert their spending from discretionary categories to essentials.
“Compared with December 2024, sales volumes did rise by 3.1% (or 4.9% in cash terms), but retail sales volumes remain below pre-pandemic levels.
“With high street footfall declining thanks to the rainy weather in the run-up to Christmas, more shoppers diverted their spending online. Online sales penetration rose to 28.3%, the highest for four years, since January 2022 at the tail end of the pandemic.
“Overall, the final quarter of 2025 will have been a disappointment for many retailers. We have already seen profit downgrades and corporate distress amongst some high-profile names, and there may be more to come as post-Christmas trading announcements continue through January.
“Looking ahead to 2026, retailers will be hoping that falling inflation and interest rates encourage shoppers to part with their hard-earned cash, or else the bad news we’ve already seen at the start of the year could be a taste of things to come.”
-Ends-
Notes to Editors:
Based on the 7am edition of ONS data released on 23rd January here: https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/december2025
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