Bulletin: Christmas trading results

Retailers’ Christmas results

Kantar data shows a strong headline performance for UK food and drink retail over Christmas 2025. Sales were £13.8bn, up 3.8% in the 4 weeks ending 28 December 2025. 

However, much of this was delivered via inflation – inflation was around 4.3% so, in real terms, sales actually shrank, despite very high promotional participation. Strong headline sales do not indicate that UK households are in a position to indulge in extra spending, even at Christmas.

Looking deeper into the data, the picture is more complex. Discounters continued to gain share, with Lidl and Aldi reporting robust sales, while Ocado and M&S delivered standout premium and online-driven performances.

See the latest article: Retailer’s Christmas results: learnings for 2026.

IGD opinion

Retailers that combined value, operational excellence and compelling festive ranges performed best - offering clear lessons for 2026 as shoppers remain value-conscious and inflation‑pressured.

GLP-1 led innovations

This year’s product launches are landing against a markedly different backdrop to the previous year with the rapid rise of GLP-1 medication usage and the continued demand for healthier products. Across the UK, the new products tell a consistent story: smaller portions, higher protein, higher fibre, and a greater focus on overall nutrient quality.

See our latest article: January 2026’s ‘GLP-1 led’ health innovations.

IGD opinion

Rather than reacting narrowly to just GLP-1 medications, many businesses are responding to underlying dietary shifts that are likely to persist, regardless of how quickly GLP-1 uptake grows. Brands and retailers that embed sustainable health principles into core ranges, backed by credible nutrition communication and accessible formats, will be better equipped to meet ongoing demand shifts.

GDP slightly ahead of target

Monthly GDP data from the ONS shows that the UK economy grew by 0.3% in November, in real terms, when measured month-on-month. Most of this growth was driven by services, with manufacturing and construction still very weak.

Although the data is still provisional and based on incomplete returns, having 11 months of results now allows a reasonable estimate for full‑year GDP performance. Real GDP growth for 2025 is likely to fall within the 1.2% to 1.5% range, with the strongest momentum seen in the first half of the year. This would place the out‑turn slightly above the OBR’s March 2025, forecast of 1.0%.

IGD opinion

Average real GDP growth from 2000-9, (before the disruptions of Covid and subsequent shocks), was around 2.0%, meaning that even 1.5% for 2025 represents subdued economic performance by historical standards. Furthermore, much of the growth is likely to reflect population increases rather than underlying productivity improvements, limiting its contribution to long‑term prosperity. 

England’s farmland is entering a pivotal year

New groundwork is being laid to assess soil health, land use, and climate resilience, providing the evidence base that future farm policy will rely on.

• Baselining helps measure and drive improvements in sustainability and efficiency on farms.

• It will shape the development of schemes like the Sustainable Farming Incentive and the Land Use Framework.

Farmers now face a defining moment: prepare for deeper reporting, or risk falling behind as data becomes central to funding and compliance.

See our latest article, UK farming insight from 2025 and looking ahead to 2026.

Scottish Budget 2026-27

The Scottish Government has set out its 2026‑27 Budget, using its devolved tax and welfare powers to support households during a period of high living costs. Key policies include free NHS prescriptions, free university tuition, and abolition of peak rail fares, all aimed at strengthening spending power for lower‑income households.

New measures for 2026‑27 include:

• Free breakfast clubs in all primary and special schools by 2027

• Higher benefit payments for families with children

• 15% non‑domestic rates relief for retail, hospitality, and leisure.

Tax changes will shift more burden onto higher‑income households through new taxes on expensive homes and private flights, plus a freeze in higher‑rate thresholds

IGD opinion

These measures will help protect household incomes but continue the trend toward a more progressive tax structure, increasing the burden on higher earners. While the household support package may soften pressure on lower‑income families, the freeze in higher‑rate thresholds will draw more households into higher tax bands, affecting disposable income and spending behaviour. With elections in May 2026, this Budget signals a clear policy direction centred on redistribution and cost‑of‑living mitigation.

Employment Rights Act

The UK's Employment Rights Act (ERA) 2025 started its phased implementation. It aims to strengthen parental leave rights, aiming to give working families greater security. Proposed changes include improved access to leave and pay, streamlined processes for employers, and measures intended to help parents balance work and childcare.

Welfare standards for laying hens and lambs

The Government has announced new proposals to improve welfare standards for laying hens and lambs. The plans include updated regulations on housing, care, and handling to ensure higher welfare across farms. The measures form part of ongoing efforts to modernise animal welfare rules, with stakeholders invited to provide feedback before changes are finalised.

Groceries sector survey

The Groceries Code Adjudicator has opened the 2026 groceries sector survey, inviting suppliers to share confidential feedback on how they are treated by the 14 designated retailers. The survey runs until 22 February 2026 and will help the GCA assess Code compliance and identify issues such as payment delays or invoice discrepancies. Results will be published in spring 2026.