Responding to the latest ONS Retail Sales Index figures, which showed sales up +3% by value, and up -1.2% by volume, Dr Kris Hamer, director of insight at the British Retail Consortium (BRC), says: “August closed out a bright summer of retail sales on a high note, with volumes up for the third month in a row. The prolonged sunshine, bank holiday and interest rate cut all helped to boost sales, especially for clothing and books. People are also spending more on their homes, with furniture seeing a boost for another month following a long period of decline.
“Even if this sales growth continues, it would not be nearly enough to mitigate the mass of costs hammering the industry since last year’s Budget. Business confidence remains weak. Earlier this summer, 56% of CFOs described their feelings about trading conditions over the next 12 months as 'pessimistic'. And, there is little sign of improvement in the run-up to Christmas, especially with the Budget falling so close to Black Friday and fears of potential further tax rises.
"Government can help improve confidence by ensuring Business Rates reforms deliver a meaningful reduction for retailers and that no shop pays more. This will allow retailers to invest more in jobs and stores, and most importantly, protecting customers from the increased costs filtering down to them.”
Sagar Shah, an associate partner at McKinsey & Company, comments: “Back-to-school shopping and end-of-season sales lifted retail sales volumes by +0.5% in August.
“Clothing stores, butchers and bakers, and non-store retailing grew in August, likely boosted by consumers grabbing end-of-season bargains and parents shopping for the new academic year. This activity, also saw department stores return to growth, after a -1.5% decline in July sales.
“Our September 2025 consumer research shows that 51% of UK shoppers are worried about rising prices. To compensate, consumers are making trade-offs – tightening the belt on some purchases to free up budget for festive splurges.
“Looking towards Q4, 23% plan to spend more this holiday season than in 2024. To capture their attention, retailers should double down on value-driven offers, sharpen omnichannel experiences, and tailor strategies to regional and demographic spending priorities. Those who strike the right balance will capture the growth opportunities presented in the golden quarter.”
