UK retail sales posted a stronger-than-expected performance in August, with total sales up 3.1% year on year—well above both the 1% growth recorded in August 2024 and the 12-month average of 2%.
Food sales rose 4.7%, while non-food sales increased 1.8%, marking a sharp reversal from last year’s decline.
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Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), credited the uplift to “sunny weather and an interest rate cut”, pointing to robust demand for computing and gaming ahead of the school year.
Furniture also picked up after months of weak sales. However, she noted that school clothing and footwear lagged, with some families opting for second-hand purchases amid tighter budgets.
Yet, much of the food sales growth stemmed from higher prices rather than increased volumes, as food price inflation remained above 4% in August.
Non-food goods and housing market provide support
Beyond groceries, the non-food sector also showed encouraging signs. In-store sales rose 1.3%, while online climbed 2.7%, both beating their annual averages. Online penetration for non-food edged up to 35.8%, though still short of the 12-month average.
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By GlobalDataLinda Ellett, UK Head of Consumer, Retail & Leisure at KPMG, said:
“Non-food goods grew around 2%, with moderate growth in the housing market helping to continue the upturn in home related purchases.”
She highlighted the positive effect of home appliances, accessories, DIY and garden goods, supported by activity in the property market after April’s Stamp Duty changes. New mobile launches and computing products also lifted sales, as families readied for the new school year.
Rising prices and budget concerns cast a shadow
Sarah Bradbury, CEO of IGD, warned that food price inflation had already hit 4.9% in July, with staples such as beef, chocolate and coffee driving up costs. Shopper confidence has now fallen for three consecutive months, weighed down by higher energy bills, unemployment concerns, and fears of looming tax rises.
While rate cuts and easing mortgage costs have provided some relief, many households remain wary. Bradbury added:
“The emotional weight of rising energy bills and fears of tax hikes in the Autumn Budget are adding to the strain… volumes remain under pressure.”
Looking ahead, Dickinson expressed concern about the late timing of the Autumn Budget, set for just days before Black Friday:
“With the later-than-expected Budget falling just days before Black Friday, many are uneasy about how consumer confidence and spending could be impacted by tax rise speculation in the run-up to Christmas.”
Retailers are now calling for clarity on business rates reforms, which they argue could remove uncertainty, encourage investment in local communities, and help limit the price rises already troubling consumers.
August in numbers
| Category | Year-on-Year Growth | Notes |
| Total Retail Sales | +3.1% | Stronger than 2024 and above 12-month average |
| Food Sales | +4.7% | Driven by price rises more than volumes |
| Non-Food Sales | +1.8% | Rebound after 2024’s decline |
| In-Store Non-Food | +1.3% | Returned to growth after two years of decline |
| Online Non-Food | +2.7% | Lift from tech sales and back-to-school purchases |
| Online Penetration (Non-Food) | 35.8% | Slightly higher, but below 12-month average |
