LocalVerse Report - January 2025 VS 2024 Retail Comparison
January 2025 VS 2024 Retail Comparison
In January 2025, the UK retail sector exhibited varied performance across different categories. Independent clothing stores continued their downward trend, albeit with a less pronounced decline than in January 2024. Independent household goods stores showed signs of recovery, outperforming their January 2024 figures. Conversely, independent food stores experienced a dip compared to the previous year, following a strong 2024. The sports equipment, games, and toys sector saw significant growth, building on an already successful year. Meanwhile, the computers and telecom equipment sector maintained positive performance, though growth rates slightly lagged those of January 2024. Based on data from Office of National Statistics (ONS) and major news sources.
Sector Performance Comparison
Independent Clothing Stores
Independent clothing stores continued their decline in January 2025, from the numbers published from ONS, sales decreased by 18.6% from December though less sharply than in Janurary 2024 where it decreased by 31.5%. Competition from online retailers, changing consumer preferences, and economic pressures on discretionary spending remain key challenges. The high street has been particularly affected, with several long-standing stores closing. Dinghams Cookshop in Salisbury shut after 40 years, citing unsustainable costs, while Dobbies closed its Northampton branch due to inflationary pressures. TimePiece, a family-run watch repair shop in Bolton, also shut after 19 years, reflecting declining foot traffic and the shift to online shopping. These closures highlight the persistent struggles faced by independent retailers.
Independent Household Goods Stores
January 2025 marked a positive shift for independent household goods retailers, from the numbers published from ONS, sales decreased by 0.6% with performance improving compared to January 2024 where it decreased by 6.5%. This resurgence can be linked to increased consumer investment in home improvements and furnishings, driven by a desire to enhance living spaces. The Construction Products Association forecasted 3% growth in private housing repair and improvement in 2025, reflecting a wider trend of spending in this area.
Additionally, Barclays reported a 6.3% rise in spending on ‘Insperiences’—at-home experiences—suggesting that consumers are prioritising home-related purchases. Promotional activities such as seasonal discounts, in-store exclusive deals, and bundle offers likely played a key role in attracting customers back to physical stores. Retailers may have also leveraged loyalty programmes, click-and-collect incentives, and interest-free credit options to encourage spending.
Independent Food Stores
After a robust performance in 2024, from the numbers published from ONS, sales for independent food stores experienced a downturn in January 2025 where there was a decrease of 2.8% while in 2024 there was an increase of 5.3%. This decline could be due to increased competition from larger supermarket chains, changes in consumer spending priorities post-holiday season, and potential supply chain disruptions affecting product availability.
Despite this short-term dip, the long-term outlook for these stores remains positive, supported by sustained consumer interest in locally sourced and specialty food products. NielsenIQ highlights that consumers continue to prioritize fresh, locally sourced, and organic foods, driven by health and environmental considerations. This trend underscores the resilience of independent food retailers catering to the growing demand for sustainable and high-quality food options.
Sports Equipment, Games, and Toys
The sports equipment, games, and toys sector experienced substantial growth in January 2025, from the numbers published from ONS, sales increased by 14.4%, building on an already successful 2024 where sales increased by 4.6%. This rise can be attributed to a growing consumer focus on health and fitness, with more people investing in home gym equipment, outdoor sports gear, and wellness-related products. A survey by PA Consulting found that four in five consumers planned new wellness and fitness purchases by 2025, reflecting a broader shift towards active lifestyles.
Additionally, the continued popularity of gaming and home entertainment contributed to strong sales in this category, as consumers sought high-quality leisure options. Experian reported that the UK’s health and wellness boom has driven increased spending in related markets, further supporting demand. Marketing campaigns promoting the latest sports technology and gaming innovations have also played a role in driving consumer engagement, making this one of the strongest-performing retail sectors in early 2025.
Computers and Telecom Equipment
In January 2025, the computers and telecom equipment sector continued to perform well from the numbers published from ONS, sales increased by 7.8%, driven by remote work trends and the need for up-to-date technology. However, growth rates were slightly lower than in January 2024 where there was an increase by 28.5%, likely due to market saturation and extended product lifecycles. As noted by the Corporate Finance Institute, market saturation leads to increased competition, shifting the focus from customer acquisition to retention.
Rapid technological advancements and shorter product lifecycles, as explained by Wharton, contribute to slower growth despite ongoing demand. According to S&P Global, the networking industry is also expected to experience moderate recovery in 2025 after a decline in 2024.
Retail Closures & Openings
The retail sector faced notable challenges, with several independent and long-standing stores closing due to economic pressures and shifting consumer behaviours. In 2024, the UK experienced a significant number of retail store closures. According to data from the Centre for Retail Research, a total of 13,479 shops closed during the year, averaging approximately 37 closures per day. Independent retailers were particularly affected, with 11,341 closures.
For instance, Hughes Electrical, a family-owned retailer, closed its Felixstowe branch after 40 years, citing the rise of online shopping as a significant factor.
The closure of Clitheroe Books, driven by rising property rents, highlights a broader issue affecting small businesses in town centres. Owner Paul Hamer expressed concern over the increasing number of non-retail establishments, such as barbers and vape shops, which he believes contribute to the "dumbing down" of the area. He pointed out that such businesses may not attract visitors in the same way a bookshop can, ultimately harming the town's appeal. Hamer's decision underscores the challenges small businesses face considering high rental costs and shifting local retail landscapes.
Similarly, The Original Factory Shop announced the closure of its Great Harwood store, influenced by lease terminations and broader high street struggles. These closures reflect the broader trend of declining physical retail presence, influenced by increased operational costs and the growing preference for online shopping.
Tee Tea, a bubble tea and dessert store in Brighton, was forced to close after its lease expired. Despite efforts from new owners to save the financially struggling business, the landlords requested the property back in February 2025. The café is now seeking public support via a GoFundMe campaign to help secure a new location and cover operational costs. The business plans to offer special discounts and free drinks to donors once they reopen in a new spot.
The retail sector is facing significant challenges, with several long-standing stores closing due to rising costs and changing consumer habits. Notable closures include Hughes Electrical in Felixstowe, Clitheroe Books, and The Original Factory Shop, each affected by factors like high rents, competition from online shopping, and shifting local retail dynamics. On the other hand, some businesses, such as Tee Tea in Brighton, are striving to reopen by seeking public support, reflecting the resilience of small retailers navigating economic pressures.
Consumer Trends & Behavioural Shifts
In January 2025, UK consumers exhibited a cautious yet adaptive spending approach, balancing online and in-store shopping preferences. According to Barclays Corporate Banking, overall retail spending increased by 1.2% year-on-year, with non-essential spending rising by 2.7%, driven by sectors like entertainment and health & beauty. However, the Confederation of British Industry reported that consumer-facing services firms experienced a significant decline in profitability, reflecting a cautious spending mindset among households.
Additionally, NielsenIQ noted a five-point drop in the UK Consumer Confidence Index to -22 in January, indicating prevailing economic uncertainties influencing more selective spending, particularly in categories such as clothing and food. Despite these challenges, certain sectors, notably health and beauty, have successfully attracted consumers back to physical stores, offering unique products and in-store experiences that resonate with the health and wellness trend.
Key Takeaways & Outlook
The UK retail sector in January 2025 demonstrates resilience amidst economic challenges. Sectors that have adapted to changing consumer preferences. This growth was particularly evident in health and beauty products, where spending rose by 10.7% according to the British Retail Consortium (BRC), influenced by social media trends and endorsements have seen positive outcomes.
However, traditional retail models, especially independent stores, must innovate and differentiate to remain competitive. Looking ahead, retailers should focus on enhancing digital presence and discoverability, offering unique in-store experiences, and closely monitoring consumer trends to navigate the evolving market landscape.
At Localverse, we help retailers stay ahead by providing data driven insights into shifting consumer trends, market demands, and competitive positioning. Our innovative products empower businesses to enhance their digital presence, optimise in store experiences, and adapt to changing retail dynamics with confidence. By leveraging our expertise, independent retailers can make informed decisions that drive growth and resilience in an evolving market. Contact Localverse today to discover how we can support your business.
Conclusion
In summary, January 2025 presented a mixed landscape for UK retailers. While certain sectors like household goods and sports equipment experienced growth, others, including independent clothing and food stores, faced challenges. The ongoing shift towards online shopping, coupled with economic pressures, underscores the need for retailers to adapt strategies that align with changing consumer behaviours and market dynamics.