Britons splurge on food, cut back on gifts as retailers warn of tough 2026

Britons splurge on food, cut back on gifts as retailers warn of tough 2026 | Global Banking & Finance Review | GBAF

Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Home > Finance > Britons splurge on food, cut back on gifts as retailers warn of tough 2026

Finance

Britons splurge on food, cut back on gifts as retailers warn of tough 2026

Published by Global Banking and Finance Review

Posted on January 8, 2026

Featured image for article about Finance

Tags:retailers consumer perception UK economy unemployment rates financial management

By James Davey, Paul Sandle and Sarah Young

LONDON, Jan 8 (Reuters) - Britons prioritised festive food but thought twice about spending on clothing and gifts over Christmas, trading updates from Tesco, Marks & Spencer and Primark showed on Thursday.

December's solid food sales offered some relief for major retailers, but lingering caution and stubborn inflation cloud the outlook for 2026.

Tesco, Britain's biggest food retailer, reported a 3.2% rise in underlying UK sales for the six-week festive period, calling it a "strong" Christmas. That was below summer growth of 4.6% and slightly under analyst forecasts. Its shares fell 5%.

'COUNTING EVERY PENNY'

Marks & Spencer's underlying food sales jumped 5.6% in the Christmas quarter, but clothing, home and beauty dropped 2.9%, hit by weak demand and the fallout from a cyber hack last year.

That dovetailed with Primark owner Associated British Foods, which said Britain's clothing market was "difficult" over Christmas. Its shares slumped 11% after it also warned of falling sales in continental Europe.

Greggs, Britain's biggest fast-food chain, flagged subdued consumer confidence and guided to flat profit this year.

Tesco CEO Ken Murphy said consumer confidence was mixed, with some shoppers "counting every penny".

"I think we've seen over Christmas that, despite comments to the contrary, people enjoyed Christmas ... they traded up," he told reporters.

"I can't legislate for what 2026 holds for anybody."

Consumer confidence remains fragile as unemployment rises. Official data last month showed Britain's jobless rate at its highest since early 2021.

On Tuesday, fashion retailer Next reported better-than-expected Christmas sales but warned growth would slow in 2026. CEO Simon Wolfson said he feared employment pressures would weigh on spending as the year progresses.

(Reporting by James Davey, Paul Sandle and Yadarisa Shabong. Writing by Sarah Young and Mark Potter)

Frequently Asked Questions about Britons splurge on food, cut back on gifts as retailers warn of tough 2026

1What is consumer confidence?

Consumer confidence is a measure of how optimistic or pessimistic consumers are regarding their expected financial situation and the overall economy. It influences spending and saving behaviors.

2What is inflation?

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).

3What is the UK economy?

The UK economy refers to the economic system of the United Kingdom, which includes various sectors such as services, manufacturing, and agriculture, influencing overall growth and stability.

4What are holiday spending trends?

Holiday spending trends indicate how consumers allocate their budgets during festive seasons, often prioritizing certain categories like food and gifts, which can vary year to year.