Published: January 23, 2026 at 8:37 am
December brought little festive cheer for retailers. Beneath flat headline numbers sits a distinctly K-shaped retail landscape, with Christmas exposing a widening divide in performance. Value-led players benefited from cautious consumer behaviour, while non-food felt the full force of fragile confidence.
Households spent smarter over Christmas, particularly in grocery. Consumers leaned heavily on promotions and shifted spend from eating out to premium at-home meals. Retailers combining strong value perception with quality credentials were the clear beneficiaries.
Discretionary non-food categories faced a toxic mix of weak demand, lingering uncertainty following the late November Budget, and margin-eroding promotions. Many retailers were forced to discount earlier and harder to defend market share, putting profitability under strain.
Retail is becoming increasingly polarised – between businesses with sharp positioning, flexible operating models and a deep understanding of what customers value today, and those being left behind as the market reshapes around them.