British retailers under pressure in the 'golden quarter'

British retailers did not achieve any notable successes in the pre-Christmas period, and the outlook for the new year remains bleak. Companies face the challenge of new taxes, while unsettled consumers are curtailing their spending. According to a report by the British Retail Consortium (BRC), the so-called 'golden quarter' was disappointing: sales increased by only a meager 0.4 percent year-on-year. After a difficult year in 2024, when retail sales rose by only 0.7 percent, retailers had hoped for a better Christmas business. Food sales increased by 3.3 percent, while non-food products declined by 1.5 percent. BRC Chief Executive Helen Dickinson described 2024 as a year marked by weak consumer confidence and challenging economic conditions. The hoped-for boost from the crucial 'golden quarter' did not materialize. Nevertheless, there were some bright spots in beauty products, jewelry, and electronics, which achieved good sales during the Christmas season. For 2025, the BRC expects only modest sales growth of an average of 1.2 percent, which is below the projected inflation of 1.8 percent for store prices. Dickinson warned that this could lead to a decline in sales volumes. The introduction of new packaging levies as well as measures by the Labour government, which include additional business taxes and employment laws, could increase retailers' costs by 7 billion pounds. Without the prospect of covering these costs through higher sales, retailers may be forced to raise prices and cut investments, which could negatively impact town centers and their communities. The Labour government plans to introduce an initial budget in April with tax increases of 40 billion pounds, targeting small and medium-sized businesses, the middle class, and the wealthy in particular. In the future, the minimum wage and national insurances paid by companies on behalf of their employees will increase significantly. The business climate is correspondingly bleak, and companies are already responding with job cuts and freezing projects and investments. Linda Ellett from KPMG stated that the retailers' lukewarm performance in recent months is due to the continued careful budgeting by consumers in an environment where many costs remain at a high level compared to previous years.