Retail sales increase as warm weather and higher prices provide boost

Total retail sales in the UK rose by 2.5% in July, up from a growth of 0.5% in July 2024. This was above the 12-month average growth of 1.9%.

Food sales saw a year-on-year increase of 3.9%, up from 3.3% the same time last year. This was above the yearly average growth of 3.2%, although the recent rise in sales is likely due to higher food prices than rising demand.

Non-food sales, which include fashion, household goods and toys, increased 1.4% in July, against a decline of 1.8% in July 2024. This was above the average yearly growth of 0.8%.

In-store non-food sales and online non-food sales increased 1.9% and 0.3% year-on-year, respectively. This was against a decline of 1.8% for in-store non-food sales and a 3% decline in online non-food sales in July last year.

The proportion of non-food items bought online decreased to 34.8% in July from 35.1% over the same period last year.

BRC chief executive Helen Dickinson said: “Food sales did well in early July, thanks to warm weather and a packed sporting schedule, though this momentum failed to hold for the rest of the month.

“Rising food inflation meant increased spending was more a result of higher prices than improved demand. Fashion sold well early in the month, but deteriorated as weather worsened, while homeware and indoor furniture grew steadily, recovering from the previous year’s decline. Gaming and toys sold particularly well, as nostalgic adults purchased products like Lego.”

She warned that the level of growing sales “is barely touching the sides” of covering the added £7bn imposed costs on retailers from the latest Budget, which could see businesses making decisions on “the future of shops and jobs, and ongoing pressure would push prices higher.”