UK Retail Sales Growth Above Forecasts in August

UK retail sales rose 2.9% year-on-year on a like-for-like basis in August 2025, accelerating from July’s 1.8% gain and beating market forecasts of 2%. This marked the strongest growth in four months, supported by warmer weather that boosted demand for food, furniture and back-to-school goods. However, much of the rise reflected higher food prices rather than stronger volumes. Food sales jumped 4.7% compared with a 1.8% increase for non-food categories, highlighting the continued impact of inflation on household spending patterns. Online sales also gained modestly, suggesting consumers remain cautious in discretionary purchases. The BRC noted that while August’s figures were encouraging, retailers are still wary of subdued consumer confidence ahead of the key Christmas trading period. The sector faces ongoing challenges from elevated borrowing costs, higher energy bills, and uncertainty over the government’s upcoming November budget.