After a gloomy autumn that saw retail sales volumes slump by 0.8% in October 2025 there was cause for optimism as an unexpected lift of 0.4% reversed the trend in December. In fact, retail sales volumes rose by 1.3% in 2025, following a rise of 0.2% in 2024, and falls in both 2022 and 2023. But despite this being the second consecutive annual rise, volumes did not recover from the 2023 fall, and remained below 2019 pre-coronavirus (COVID-19) pandemic levels.
Phil Monkhouse, UK Country Manager at global financial services firm Ebury, says: “Festive spending unexpectedly picked up in December, with sales volumes rising by 0.4%, giving retailers a welcome holiday boost after a disappointing November and October.
“Despite ongoing cost-of-living pressures, consumers splashed the cash in December, suggesting confidence returned after an uncertain few Autumn months.
“This rebound during a vital trading window offers a timely lift for retailers and sets a more positive tone for the year ahead. A 1.3% rise in sales volumes in 2025 points to a sector showing real resilience, following a challenging twelve months marked by Budget measures and ongoing international trade pressures.
However, there is unlikely to be much let-up in the challenges facing retailers into 2026 and they will be looking to use all the tools in their arsenal to keep consumers coming back and bringing new revenue streams online to build financial resilience, including developing their retail media capabilities.
“Looking ahead, sticky inflation could keep interest rates higher for longer, limiting disposable income and dragging down consumer spending. The wider global and domestic backdrop also offers little reassurance for retailers, with renewed trade tensions and geopolitical uncertainty stoking market volatility and threatening supply chains.
“As we head into 2026,” Monkhouse predicts, “retailers will need to stay vigilant – prioritising robust FX risk management and securing access to flexible finance to help weather what remains an unpredictable trading environment.”
