Introduction

December is traditionally expected to be the crescendo of the retail calendar, driven by last-minute Christmas shopping, gifting urgency, and festive consumption. However, December 2025 told a more complex story for the UK online retail market. Following the intense promotional surge of November, the market experienced a sharp post-peak correction, with most categories recording month-on-month declines and a softer year-on-year comparison.

Using the latest Sales Performance Index data, this blog unpacks how December unfolded across key categories, highlighting relative winners, notable under-performers, and what these movements reveal about evolving consumer behaviour as we closed out 2025.

Overall Market Performance: A Seasonal Pullback

The Total Market declined −18.1% MoM, reflecting the natural slowdown after Black Friday and Cyber Week. On a YoY basis, the market was down −7.1%, while YTD YoY performance remained broadly flat at −0.8%, suggesting that December softness did not significantly derail full-year performance.

This pattern confirms that much of December demand was pulled forward into November, leaving retailers to contend with lower urgency, tighter consumer budgets, and delivery cut-off constraints in the final weeks before Christmas.

Top-Performing Sectors

1. Beers & Wines (+31.1%)

Beers & Wines was the clear top performer in December, recording the strongest month-on-month growth across the entire market. This surge was driven by festive celebrations, home entertaining, and last-minute stock-ups for Christmas and New Year gatherings. While the category remains down year-on-year (−11.3%), December once again highlighted its high seasonal elasticity, with demand concentrated around social occasions rather than promotional cycles.

2. Audio (+15.6%)

Within Electricals, Audio stood out as one of the few sub-categories to post positive MoM growth. Demand was supported by gifting of headphones, speakers, and home audio accessories, particularly as affordable tech gift options after Black Friday. Despite this uplift, Audio remains structurally pressured on a YoY basis (−15.5%), reinforcing that December demand was largely event-driven rather than sustained.

3. Gifts (+5.4%)

Gifts remained resilient in December, ranking third for MoM growth. The category benefited from late-stage gifting behaviour, digital gift solutions, and fast-delivery propositions. Importantly, Gifts also delivered strong YoY (+26.3%) and YTD YoY (+16.9%) growth, confirming its role as one of the most dependable December categories regardless of broader market volatility.

Under-Performing Sectors

1. Garden (−33.8%)

Garden recorded the steepest MoM decline in December, reflecting deep seasonality and minimal relevance during winter months. Both Gardening (−34.0%) and Garden Furnishings (−33.8%) saw sharp pullbacks, making this category the weakest performer overall. The data reinforces that Garden demand remains highly weather- and season-dependent, with limited insulation from festive trading.

2. Home Improvement (−30.1%)

Home Improvement experienced a significant December decline as consumer focus shifted away from large or disruptive projects during the festive period. After modest YoY growth earlier in the year, December softness highlights the category’s vulnerability once promotional and practical purchase triggers fade.

3. Furniture (−29.4%)

Furniture ranked third among the weakest performers, with consumers deferring high-ticket purchases amid delivery cut-off concerns and post-November spending fatigue. While Furniture remains marginally positive on a YTD basis (+4.3%), December confirmed that big-basket home purchases are not a priority during peak gifting season.

Health & Beauty: Mixed Signals Beneath the Surface

Health & Beauty declined −20.5% MoM and −10.0% YoY, but remained +5.6% YTD YoY, underlining its longer-term resilience.

Within Beauty:

• Haircare (+0.9% YoY, +16.9% YTD YoY) and

• Skincare (+5.2% YoY, +13.5% YTD YoY)

continued to outperform, reflecting sustained interest in self-care and routine-based categories.

Conversely, Makeup (−20.9% YoY) and Fragrance (−14.6% YoY) softened after strong November gifting performance, reinforcing the idea that premium beauty demand peaked earlier in the season.

Mobile Commerce: Structural Pressure Continues

Mobile Commerce declined −13.8% MoM and −6.1% YoY, with both Smartphones and Tablets under pressure. Tablets were particularly weak (−26.5% MoM, −11.0% YoY), suggesting saturation and reduced upgrade urgency.

Despite this, mobile remains central to the customer journey, even if device sales themselves are slowing.

Key Takeaways for Retailers

1. November Cannibalisation Is Now the Norm

December 2025 reinforced how aggressive November promotions continue to pull demand forward, leaving December structurally softer than historic expectations.

2. Gifting Remains King

Gifts, Beers & Wines, and selective Beauty and Sports categories proved that occasion-led spending still performs when relevance and convenience are high.

3. Essentials and Value Win Long-Term

Strong year-to-date momentum in categories such as Haircare, Skincare, Small Appliances, and Sports & Outdoors highlights a clear consumer shift toward value, utility, and wellbeing.

4. Seasonal Categories Require Smarter Phasing

Fashion, Home, and Garden brands must continue refining promotional timing and inventory planning to avoid overexposure following November peaks.

2025 in Review: Steady Growth Despite Category Shifts

Overall, 2025 closed with the UK online retail market broadly flat at +0.3% YoY, reflecting a year shaped more by promotional peaks and corrections than consistent demand. Health & Beauty (+7.5%) and Home & Garden (+5.5%) emerged as the strongest full-year performers, supported by sustained interest in self-care and home investment. Within Beauty, Haircare (+12.4%) and Skincare (+9.3%) led growth, while Electricals ended slightly positive (+0.6%), driven by Small Appliances (+3.1%) and Accessories & Hobbies (+15.9%). In contrast, discretionary sectors such as Clothing (−6.5%), Beers & Wines (−6.7%), and Gifts (−4.3%) faced ongoing pressure. Mobile Commerce (+1.4%) delivered modest growth overall, masking weakness in Tablets. Collectively, the data highlights a year where essential and lifestyle-led categories consistently outperformed discretionary spend.

Conclusion

December 2025 closed the year with a clear message: peak demand is no longer concentrated solely in December. While festive gifting and seasonal consumption remain important, the data confirms that promotional intensity earlier in Q4 increasingly dictates end-of-year performance. Retailers that aligned with gifting urgency, essentials, and experience-led demand were best positioned to absorb December softness, while those reliant on traditional last-minute shopping faced greater volatility. Looking ahead to 2026, smarter demand phasing, disciplined promotions, and focus on structurally resilient categories will be critical to driving sustainable growth.