The UK retail landscape witnessed a stark divergence in performance during the critical 2025 Christmas window, as market-leading agility clashed with structural headwinds. Next PLC emerged as the definitive victor, reporting a 10.6 per cent growth in full-price sales for the nine weeks ending December 27. Exceeding internal forecasts by £51 million, this performance was propelled by a 38.3 per cent leap in international online revenue and improved stock availability following prior-year supply chain disruptions. In contrast, Primark struggled against weak consumer sentiment in Continental Europe, seeing like-for-like sales retreat 2.7 per cent across its global estate.
Value and volume: The supermarket fashion hedge
While fashion-forward retailers like Next capitalized on ‘investment dressing,’ grocery giants successfully leveraged their ‘one-stop-shop’ appeal. Tesco’s F&F clothing brand recorded a robust 4.4 per cent sales increase during the six-week festive peak, benefiting from a 23-basis-point gain in overall UK market share. Similarly, Sainsbury’s Tu Clothing outperformed the broader market by 10 percentage points in volume, driven by record-breaking sales of seasonal nightwear. This ‘supermarket growth’ highlights a consumer shift toward affordable indulgence and convenience, contrasting sharply with Marks & Spencer, where clothing and home sales dipped 2.5 per cent as the brand continued to navigate the recovery phase of a disruptive cyber-attack from earlier in the year.
Strategic outlook: Profitability amidst volatility
As the sector enters 2026, the focus has shifted from top-line growth to margin protection. Next has raised its pre-tax profit guidance for the fifth time this year to £1.15 billion, reflecting strong cash generation. Conversely, Primark owner ABF warned of adjusted operating profits falling below last year’s levels due to increased markdowns required to clear excess inventory. The industry now faces a ‘normalization’ period; while Next forecasts continued 4.5 per cent growth through 2027, the broader market remains cautious, balancing the benefits of high-speed digital fabrication against rising employment costs and fragile consumer confidence.
Next is a FTSE 100 omnichannel retailer specializing in clothing, footwear, and home products. Operating over 500 stores and a dominant online platform, it serves key markets in the UK and Europe. With a 2026 profit outlook of £1.15 billion, Next remains a benchmark for retail resilience and logistical excellence since its 1982 rebranding.
