Christmas Shopping: How Retailers Fared Over Festive Period

The festive period is often anticipated as leading to a rise in consumer spending, as people increase their food and drink purchasing, with the 2025 Christmas period showing no desires to slow down.

In the run-up to Christmas, UK supermarkets were seeing an intake of £500m (US$670.4m) a day - a new record across the industry. 

However, consumer spending did not raise across every sector of the supermarkets, with many turning towards low-priced online retailers for non-food items.

Consumer habits for Christmas

Many of the UK's retail giants reported year-on-year sales increases, particularly regarding food and drink. The Christmas period is typically considered a key time for retailers, as the increased amount of consumer spending adds a significant portion of their annual sales and profits. In the four weeks to December 28th, UK supermarkets took in a record £13.1bn (US$17.6bn), which was up 3.8% from the year prior.

Though most supermarkets saw the benefits of consumer spending, Asda did not bear witness to this increase - with sales falling to 4.2% for the same period in 2024, with a final total of £4.3bn (US$5.8bn). Consumers also turned away from High Street stores, opting to channel their spend towards food rather than items. According to accountancy firm BDO, sales for non-food categories were down 1.4% in December 2025 than the same period the year prior - this includes fashion, homeware and electronics.

Sophie Michael, Head of Retail at BDO, explains: "Due to persistent food inflation and high living costs, consumers reduced their discretionary spending over the Christmas period, focusing on festive food, drinks and experiences instead of products."

Retailer growth

Tesco saw one of the highest sales increase over Christmas 2025, with sales up 3.2% from last year, witnessing its highest market share in more than 10 years.

The supermarket said that food sales were up 5.2%  over the Christmas period, with strong sales in fresh produce and party food in particular. The Tesco Finest range saw a sales growth of 13%. This is anticipated to result in annual operating profits at the upper end of its predicted the £2.9bn-£3.1bn (US$3.6 - US$4.2bn) range. 

GlobalData Retail's Associate Director, Sofie Willmott, explains this is a result of price-matching Aldi, offering lower prices to its Clubcard holders, stating: "Tesco has seen a consistently strong performance over the last couple of years really, where it's really focused on price."

Following the cyber-attack on M&S in 2025, leading to problems with stock and inventory, confidence in this retailer was lower than in previous years. In its clothing, home and beauty departments, it has seen a 2.9% drop in sales. However, M&S still saw the benefits of the Christmas shopping period.

In the three months to 27th December, M&S reported that food sales were up 5.6%, seeing a record number of customers. CEO Stuart Machin says this is a result from its 'Christmas Hero Lines', as well as its in-store bakery, deli and Italian ready meals success.

"Food sales were strong and the business continues to outperform, hitting a new market share milestone in the period," he adds.

For Sainsbury's, the six weeks to January 3rd saw a 5.1% rise in total grocery sales, with a strong demand for its 'Taste the Difference' line resulting in a 15% sales increase for the range during the Christmas quarter. Despite its growth in grocery sales, however, the supermarket was also affected by the drop in non-food purchasing. 

Sainsbury's non-food and clothing sales were 1% lower, with its Argos sales falling 2.2% in the period. Excluding its fuel sales, Sainsbury's saw a 3.4% like-for-like sales rise in the 16 weeks running up to January 3rd. This marks a slowdown from the previous three months' increase of 4.3%, however, the supermarket remains on track to meet its retail earnings of more than £1bn (US$1.34bn) for the full year.

Simon Roberts, CEO of Sainsbury's comments: "When we strengthened our profit guidance in November, we said we planned to invest in the strength of our competitive position through the most important trading period of the year.

“We expected the market to become more competitive with customers spending more carefully and we invested in balanced choices to offer great value for money, outstanding quality and innovation and leading customer service and availability, both in store and online.”

Though consumers are turning more towards online retailers such as Temu and Shein for their clothing and and electronics, the grocery side of supermarkets still saw significant sales. For many supermarket business leaders, this will result in the meeting of their anticipated operating profits and a celebratory finish to 2025.