Up to 10 billion pounds in festive sales at risk as consumer confidence dips

New analysis from Alvarez & Marsal (A&M) suggests UK retailers could see between six and 10 billion pounds in potential lost sales this festive season, as consumer confidence weakens and uncertainty around the Autumn Budget weighs on spending.

The findings indicate that retail sales have fallen steadily throughout 2025, declining 2 percent between the first and third quarter, contrasting an average 6 percent growth rate seen from 2022 and 2024.

Typically, retailers benefit from an average 15 percent uplift from the third to fourth quarter, driven by seasonal trading. A&M warns, however, that if this surge does not materialise, the lost value of sales could be significant.

Confidence fell for the first time in November since the 2021 cost-of-living crisis, disrupting what is usually a positive month for sentiment in the “golden quarter”.

Speaking on the trends, Erin Brookes, European retail and consumer lead for the consultancy firm, said: “Retail sales have been gradually declining all year and, if this trend is not reversed, retailers stand to lose out on significant revenues this festive season.

“Consumers are clearly feeling the strain, with stubborn inflation and an unpredictable Budget meaning they are holding back on spending in the all-important golden quarter.

“This Black Friday weekend, retailers face a more challenging landscape and need to adapt to a consumer base that is more selective, price-sensitive and value-driven than before. The question is whether shoppers will find real value this weekend to lift spending and help retailers end the year on a high.”