Diane Wehrle, Beaculair’s Brand Ambassador considers the opportunities for high streets during the 2025 Christmas trading period.
Once again, the lead up to Black Friday was challenging for high streets, with retail spending declining annually in the preceding two months (-4.1% YOY in both September and October). This certainly wasn’t a first as spending in September and October 2024 was lower than in the same months in 2023, however, it clearly demonstrates the persistent nervousness of consumers around spending. Indeed, this is consistent with the latest economic data; inflation remains stubbornly above the government’s target of 2%, and at 5% unemployment is the highest it’s been since January 2021, which is likely to have been exacerbated by the increased national insurance burden imposed on businesses from the last budget. All of these elements are reflected in the current level of consumer confidence which is languishing; the GFK index score in November sat at -19, with no discernible improvement since September 2024.
Despite this, the initial results based on footfall suggest that Black Friday encouraged consumers to spend. Sensormatic identified that whilst on Black Friday itself footfall into high street stores on was -4.5% lower than on Black Friday 2024, in the days leading up to Friday it was +2.8% higher than last year and over the weekend it was +1.5% higher than last year.
So what does this suggest might pan out for high street spending during the two key trading months of November and December?
With the uncertainty for households exacerbated by the rumour mill in the lead up to the Budget it’s probably a safe bet to say that spending during November will be lower than last year. Indeed even before the rumours started to circulate about tax rises I forecast that high street sales would be -1% below November 2024, partly due to the strong comparable provided by November 2024 when spending was +1.8% higher than during November 2023. In the same vein I also forecast that during December 2025 high street spending would increase annually by +1.5%, primarily due to a decrease annually of -7.5% last year.
The initial data on footfall suggests that high street spending on Black Friday will be virtually on par with Black Friday 2024. However, the pre-Budget period clearly created jitters amongst consumers, and this is likely to have impacted spending during November as a whole. With this in mind, spending in high streets during November is likely to be weaker than anticipated, but with some stability regained post Budget, spending during December may well be stronger than forecast.
So where do the key opportunities lie for high streets during this Christmas trading period?
85% of high street spending is consistently derived from five key sectors – Fashion, Food & Drink, General Retail, Grocery and Health & Beauty – so inevitably it is spending in these sectors that will govern the performance of high streets. As with all forecasts, we look to the past to identify a likely trend moving forward, and this shows us that over the three years from 2022, there have been significant uplifts in spending from November to December in all five sectors.
Spending in towns and cities has become increasingly diversified over the past few years; this has meant that Food & Drink spending now accounts for 25% of total spending, whilst Fashion spending now accounts for 19% compared with 23% during 2022.
Over the past three years the largest increases in spending from November to December occurred in Fashion and General Retail – which includes department stores and discounters such as B&M – averaging +46.7% and +46.2% respectively. Health & Beauty spending has increased from November to December by a lesser degree – most probably having had some steam taken out by Black Friday offers – but it still has risen over the month by an average of +31.5%.
Whilst Food & Drink is now the leading sector in terms of spend across GB accounting for 25% of total town centre spending, the rate of increase in spend from November to December has been slightly lower at +25.5% – most probably impacted by working from home.
The increase in Grocery spending in high streets has been less than the other key sectors at +17.1%, which is inevitable as consumers will be focussing on large shopping trips for Christmas dining.
What these results do indicate, however, is that there is everything still to play for during the 2025 Christmas trading period. But for an individual town to maximise its own performance, understanding which sectors drives its performance is key; this enables practitioners and retailers alike to implement initiatives and interventions that appeal most strongly to its shopper population, and so successfully capture available spend.
