Total UK retail sales rose by 3.1% year-on-year in August 2025, outperforming the 1% growth in August 2024 and the 12-month average growth of 2%. In its latest survey, published 9 September, the British Retail Consortium (BRC) highlighted sunny weather and a cut to the Bank of England’s base rate as key factors in the stronger performance.
According to the BRC, spending on food and drink surged 4.7%, although this largely reflects higher prices rather than increased volumes, with staples such as beef, chocolate and coffee being particularly affected. Meanwhile, non-food sales advanced 1.8%, a marked turnaround from the 1.4% decline a year earlier.
Within the non-food category, in-store sales increased 1.3% (compared to a 2.8% decline in August 2024) and online sales rose 2.7% (up from 1.5% a year earlier), although online penetration remains slightly below its 12-month average.
Consumer mood and areas of strength
Helen Dickinson, chief executive of the BRC, stated that “sunny weather and an interest rate cut helped August round off a solid summer of sales.”
Linda Ellett, KPMG’s UK head of consumer, retail and leisure, noted in a statement that a recovery in the housing market had fuelled demand for home appliances, garden and DIY goods, while mobile phone and computing sales benefited from back-to-school spending.
Despite the positive headline figures, the UK retail market remains under pressure from a mix of persistent challenges. While consumer confidence reached its highest point this year, the overall index score from GfK remains negative at -17, showing households are more upbeat about personal finances but still cautious about the broader economy.
A significant portion of the growth in food sales was attributed to rising prices rather than increased volumes. This is a key concern for many retailers, as it suggests that consumers are paying more for the same amount of goods rather than spending more freely.
The UK’s upcoming Autumn Budget, scheduled for 26 November, has also introduced a new layer of uncertainty, with speculation about potential tax rises casting a shadow over the crucial “golden quarter”, the retail sector’s most critical sales period leading up to Christmas.
Optimistic, but cautious
The summer rebound offers a welcome boost for businesses of all sizes, particularly for those specialising in computing, electronics, homeware and garden supplies.
Sarah Bradbury, the chief executive officer of the Institute of Grocery Distribution, offered some optimism going into the winter. “Interest rates have been cut again, and mortgage rates are easing, offering some financial respite,” she said in a statement, adding that “financially resilient shoppers may remain more confident, even as they brace for a challenging winter.”
Yet rising operational costs and subdued confidence in big-ticket purchases require a cautious approach. The BRC has warned that new taxes could force retailers to make “difficult choices about the future of shops and jobs”.