Report Summary

Period covered: 06 July – 02 August 2025

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30-day membership trial now.

Retail Sales Performance:

Retail sales rose by xx% year-on-year in July according to the Retail Economics Retail Sales Index. Factors impacting the headline performance in the month include:

Sunny weather: A warm sunny start to the month helped boost spending on food, clothing and footwear. Across the month, the UK recorded a mean temperature of xx °C, xx °C above the long-term average, making it the fifth warmest July on record. Minimum temperatures were especially notable, ranking as the second highest on record.

Sporting events: Major sporting events – notably England’s victory in the UEFA Women’s Euro 2025 - spurred early consumer spending during the month. Shoppers stocked up on barbecue foods and drinks during the football excitement.

Underlying caution: Momentum eased later in the month as temperatures returned to normal. The initial sales surge faded, revealing underlying consumer caution. Shoppers became more price-sensitive, focusing on essentials and value, especially in big ticket categories.

Footfall boost: Footfall edged up slightly in July, driven by sporting and music events.

Polarised backdrop

Retail sales stayed ahead of retail inflation in July (+xx% retail sales deflator exc. fuel). Sunny weather and summer events helped to boost the mood and encourage spend. The underlying caution that has characterised 2025 so far remains, however.

The ONS reported a dip in food volumes of xx% as food inflation bites, while non-food volumes rose xx% in July. The headline CPI inflation rate rose to xx% in July (from xx% in June), the highest since January 2024.

While much of the increase in the headline rate was driven by airfares (up xx%) food & drink inflation was also on the rise, up for the fourth consecutive month to xx%. The increase was driven by beef, chocolate, coffee, and fruit juices. However, Worldpanel reported a slight easing of food inflation in August.

Retail faced competition from the entertainment category, where spend was up xx% in July according to Barclaycard. Live shows & concerts up xx%, peaking on 10 July when Lewis Capaldi tickets went on sale, while cinemas were up xx%, boosted by Jurassic World Rebirth. Eating out saw less momentum, with the category up just xx%.

This focus on entertainment helped boost footfall in big city centres. London was a particular beneficiary, with footfall up xx% month on month, and xx% year on year, driven by events including the Lionesses’ victory parade on 29 July, and Oasis’ reunion tour. Within retail, consumers remain selective, tactical and cost-aware, especially when it comes to big ticket purchases. Retailers need to continue to work hard to justify their share of wallet.

Category performances

Clothing (xx%) and footwear (xx%) had a strong month in July, as shoppers refreshed summer wardrobes and bought for summer events and holidays.

Food sales (+xx) were driven by warm weather and social gatherings in the first half of the month, driven by sporting and music events, with BBQ foods performing well.

NIQ (formerly known as Nielsen) reported total till supermarket sales growth slowing to +xx% in the four weeks ending 9 August 2025, a notable drop from +xx% in the previous month as the heatwave cooled and households cut back.

Health and beauty (+xx%) sales were driven by seasonal demand in areas such as suncare, supported by holidays and heatwaves. There is also evidence of value ranges and promotional activity shaping consumers’ choices, suggesting the sector is not immune from the caution affecting bigger-ticket categories.

Electricals (+xx%) and DIY and gardening (+xx%) stayed in positive territory but came under pressure from subdued discretionary spending. Purchasing choices were highly driven by promotional activity. 

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Consumer confidence fell one point in July