Retail Split In UK: Chain Spending Up 5% As Department Stores Lose Ground

British consumer spending is going to the chains. U.K. consumers increased their purchases at large chains by 5% in the first quarter of the year, above the rise in sales at large stores. This is reflected in the latest data from the Cardlytics platform, which show a readjustment of spending in the country several years after the pandemic-driven readjustment.

While spending remains stable in many areas, shoppers are paying increasing attention to how and where they spend. The study shows that not only do competitive prices matter, but value, convenience and quality are now key to winning or losing market share.

Online sales is the fastest growing channel this year, with a 13% increase in spending in the first quarter of the year. Promotions, discounts and points per purchase are the incentive with which users are interacting, although it is still in its infancy.

This is followed by sales in large chains and the consumption of makeup and beauty products, both up 5% year-on-year in the first quarter. Despite the similar performance of both categories, beauty sales have lost momentum compared to the same period in 2024, when they posted a 19% increase.

Consumer spending in the United Kingdom is led by chains that offer customers a better shopping experience

In contrast to the rise of these channels, department stores, which have a high market share in the country, recorded a fall of up to 5% in the first quarter. This downward trend, moreover, continues the trend recorded in the first three months of 2024, when they fell by another 4%.

The report highlights that there is a trend among consumers opting for smaller, more frequent purchases, which has resulted in the highest number of transactions relative to spending, offering a sense of affordable luxury.

Food remains a staple expense for shoppers, although it suffered a 3% drop in spending during the first quarter of this year. However, the number of transactions remains stable, suggesting that consumers are still going to the stores, but spending less.

Consumers are increasingly aware of the value added in stores, creating a relationship of trust with retailers. Companies that consistently demonstrate that they can deliver an experience beyond just price will be better positioned to build customer loyalty.