What's Happening?
In November, UK retail spending fell by 1.1% year-on-year, marking the sharpest decline in consumer card spending since February 2021, according to the Barclays Consumer Spend report. Despite Black Friday
being the busiest shopping day of 2025, the broader slowdown in consumer spending persisted. Retailers initiated Black Friday Cyber Monday (BFCM) promotions earlier to attract cautious shoppers, resulting in a record £3.8 billion spent online over Cyber Weekend. However, non-essential spending decreased for the first time since July 2024, and essential spending continued its downward trend. The report also noted a 27% drop in average order value compared to last year's Black Friday.
Why It's Important?
The decline in retail spending, despite the Black Friday boost, underscores the ongoing economic challenges faced by consumers in the UK. The data suggests that while consumers are making more purchases, they are spending less per transaction, reflecting economic uncertainty and cautious spending behavior. This trend could have significant implications for retailers, who may need to adapt their strategies to maintain sales volumes. The broader economic context, including potential changes in interest rates and inflation, will likely influence consumer confidence and spending patterns in the coming months.
What's Next?
As the holiday season approaches, retailers may continue to rely on promotions and discounts to drive sales. However, the persistence of cautious consumer behavior could impact retail performance into 2026. Economic factors such as interest rates, inflation, and fiscal policy will play a crucial role in shaping consumer confidence and spending. Retailers and economists will closely monitor these developments to assess their impact on the retail sector.
