When we looked back at the spend trends that defined the third quarter of 2024, I, and many other retail experts, were hoping that we would see an uplift in sales. Our consumer research told us that discerning consumers were holding back on making purchases until Black Friday discounts launched, with the expectation that they might make many of their Christmas purchases in this period too. This would give many retail subcategories a much-needed boost after what has been a disappointing year.

Unfortunately, this did not come to pass. Overall spend grew just 0.1 per cent from the same period in 2023, and retail spending declined -0.2 per cent from where it had been last year.

There are a number of factors behind these disappointing figures. Spending on clothing – normally a big driver of sales during the Black Friday and Christmas periods, did not fit within consumers’ priorities for the final months of 2024. Across Q4, clothing sales declined -0.8 per cent year-on-year. This chimes with our research; only 6 per cent of consumers said they planned to upgrade their winter wardrobe.

We also learned that one in three consumers were planning on doing Christmas more sustainably in 2024. If you couple this decline with the growth of reselling platforms, new clothing purchases clearly took a backseat this year.

Similarly, the electronics sector did not enjoy its usual festive boost, seeing a yearly decline of -0.2 per cent. Perhaps because there were no new games consoles on the market, consumers focused on other gifts, although the 2025 release of Nintendo Switch 2 might mean we can expect a bigger uplift this time next year. 

Health and beauty spending, which has proven resilient even in tough economic times, inspiring the phrase ‘lipstick effect,’ continued to blaze a trail.

The sector finished the year on a high, with growth of 7 per cent in comparison to Q4 2024, which followed a 7.4 per cent increase in Q3 and a 5.4 per cent rise in Q2. Health and beauty has enjoyed a stellar year, and continued to defy flatlining retail trends. 

In the final months of 2024, the travel industry enjoyed its own personal golden quarter with considerable year-on-year growth.

Travel agents saw an increase of just over 7 per cent, with the average transaction up by £163 from where it had been in 2023. Spending on airline tickets was 7.3 per cent higher, and hotels and resorts enjoyed a 3.6 per cent uplift.

Whether they are planning to hit the ski slopes or avoiding the cold and wet with a sunny getaway, plenty of consumers finished the year with travel firmly on their minds. 

Cinemas enjoyed a bumper end to the year, with Wicked, Gladiator II, Paddington in Peru, and Moana 2 all landing in October and November. Combined, these four films have grossed over £150 million at the UK box office, which is over 15 per cent of the UK’s £1.06bn total for the year.

Wicked is a standout success story, with the UK and Ireland accounting for £55.7 million of its global box office sales of more than $700 million thus far. I’m sure cinemas are hopeful that its 2025 sequel will result in a similar boost. With cinema spend up 52.1 per cent in December 2024, and a great slate of blockbusters lined up for this year, I’m optimistic that cinemas will enjoy a strong 2025.

Home entertainment also proved popular. Spending on digital content and subscriptions was up 8.4 per cent – no surprise, with hit dramas like Rivals, The Day of the Jackal and Squid Game all premiering in this time. While 61 per cent of consumers have expressed “streamflation” (the rising cost of streaming services) concerns, I suspect the demand for digital content will be sustained in 2025 if we see a similar pipeline of new releases.

It was business as usual for restaurants and bars over the winter months, but we did not see a dramatic uplift in the period, perhaps due to a subdued Christmas party season. Consumers spent just 0.9 per cent more in restaurants than they did during the same period in 2023, and 1.4 per cent more in bars, pubs, and clubs.

With the Six Nations now underway and a busy calendar of sport over the next quarter, pubs will see the benefit of increased footfall. January is traditionally a quiet month for eating out and hospitality, but it has been encouraging to see so many pubs and restaurants adapting to changing habits, especially during Dry January, with mocktails and an ever-increasing range of alcohol-free options now available. 

As we’ve observed throughout 2024, British shoppers are savvier and more sophisticated than ever when it comes to managing their money.

With Christmas costs to cover and Black Friday deals to take advantage of, non-essential spending rose by 2 per cent in the final three months of 2024. However, that was offset by a -1.9 per cent decline in essential spending, following a pattern which was also a key part of our findings in the third quarter of 2024.

All of this was clearly part of a carefully executed plan, with two thirds of consumers telling us that they are seeking out value from their weekly shop and always looking for ways to reduce food spending. Throughout 2024, our data demonstrated that consumers were working harder than ever to save on essentials and trying take full advantage of supermarket loyalty deals.

Shoppers continue to be savvy and to prioritise entertainment, travel, health, and beauty. It’ll be fascinating to see if these trends carry on as we move through 2025.

While it was disappointing to see that many retail sectors did not get the festive boost we were hoping for, as 2025 begins in earnest, I’m cautiously optimistic about what the year will bring.

We can see from our latest data that consumers are still nervous about the UK economy, with 86 per cent concerned about the continuing role of inflation and 62 per cent concerned about interest rate rises. With December’s news of a slight drop in inflation, and a number of interest rate cuts being priced in by markets across the year, this should act to reassure consumers and build confidence in the economy.

As the year progresses, I’m hopeful that a bumper year of sport, a great summer of festivals and concerts (including the Oasis reunion) and a fantastic calendar of releases at cinemas and theatres will continue to drive consumers’ desire to make memories.