Britons prioritized festive meals however thought twice about spending on clothes and items over Christmas, buying and selling updates from Tesco, Marks & Spencer and Primark proven on Thursday.
December’s stable meals gross sales supplied some aid for main retailers, however lingering client warning and cussed inflation cloud the outlook for 2026.
Tesco, Britain’s greatest meals retailer, reported a 3.2% rise in underlying UK gross sales for the six-week festive interval, calling it a “sturdy” Christmas, with its market share hitting a decade excessive.
Nevertheless, with gross sales progress beneath the summer time’s 4.6% and barely beneath analyst forecasts, its shares fell 5.5%, paring positive aspects during the last yr to 16%.
M&S’ CLOTHING SALES FALL
Marks & Spencer’s underlying meals gross sales jumped 5.6% within the Christmas quarter, however clothes, residence and wonder dropped 2.9%, hit by weak demand and the tail finish of fallout from final yr’s cyber hack.
That dovetailed with Primark proprietor Related British Meals, which stated Britain’s clothes market was “troublesome” within the Christmas quarter.
Its shares slumped 12% after it additionally warned of falling gross sales in continental Europe and hard buying and selling for its meals companies in the US. Revenue in its 2025/26 yr would fall, it stated.
Greggs, Britain’s greatest fast-food chain, flagged subdued client confidence and guided to flat revenue this yr. CEO Roisin Currie informed Reuters she remained cautious about prospects in 2026. Greggs shares fell 7%, extending losses during the last yr to 38%.
‘COUNTING EVERY PENNY’
Tesco CEO Ken Murphy stated UK customers had been eager to deal with themselves at Christmas, with many buying and selling as much as premium ranges. Tesco bought 21 million pigs in blankets from its Best vary and a couple of.5 million bottles of Prosecco, whereas get together meals gross sales soared 22%.
However he stated client confidence was blended: “You might be seeing customers whose family budgets are in fairly fine condition and then you definitely’re seeing lots of people which might be actually counting each penny.”
In 2026, Murphy expects a continuation of the development of customers consuming extra at residence reasonably than eating out to avoid wasting money and the constructing of a development of individuals eager to eat extra healthily whereas nonetheless indulging at weekends.
He was not sure whether or not rising demand for GLP-1 weight-loss medicine in Britain would have a big effect on meals gross sales this yr. “We’ll keep very near how clients are behaving and what they’re searching for and reply accordingly,” he stated.
EMPLOYMENT PRESSURES
Current information and surveys have proven UK client confidence stays fragile as unemployment rises. Official information final month confirmed Britain’s jobless charge at its highest since early 2021.
On Tuesday, style retailer Subsequent reported better-than-expected Christmas gross sales however warned progress would gradual in 2026. CEO Simon Wolfson stated he feared employment pressures would weigh on spending because the yr progresses.
He believes employment is dealing with the triple pressures of rising prices, growing regulation, and displacement by mechanization and AI.
