Retail sales volumes fell 0.5 per cent in July as shoppers shifted spending towards experiences, summer essentials and food and drink, while extreme heat and England’s World Cup run changed where and how consumers spent.
The latest Office for National Statistics (ONS) figures show retail sales volumes declined 0.5 per cent month on month in July, driven by falls in non-store retailing, down 3.6 per cent, clothing and footwear, down 2.7 per cent, and household goods, down 1.9 per cent.
However, the overall fall masks a more mixed picture, with food and drink benefiting from seasonal demand and the World Cup. Food stores recorded a 0.5 per cent increase month on month in July.
Jacqui Baker, partner and head of retail at RSM UK, said consumers “splashed out on fans and food for barbeques due to the heatwave”, while many avoided the high street during soaring temperatures.
She said consumers remained highly selective about where they spent, continuing to prioritise value and showing particular caution around big-ticket purchases.
“Consumers will spend if there’s a compelling enough reason or occasion,” Baker said. “The challenge for retailers is not simply capturing more consumer spend, but understanding what is driving it.”
For convenience retailers, the combination of hot weather and England’s World Cup run provided opportunities to capture spending on food and drink for at-home occasions, including barbecues and watching football.
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Justin Parr, chief credit officer at trade finance provider Treyd, said that while the heatwave may have kept shoppers away from the streets, it was likely to have encouraged consumers to stock up on hot-weather essentials.
“For half the month England were in the knockout stages of the World Cup. In a football-mad nation, that always helps to support sales, particularly for retailers of food and drink and clothing,” he said.
Parr added that another heatwave would have encouraged shoppers to buy products such as summer clothing, suncream and fans.
Nicholas Found, head of commercial content at Retail Economics, said sunshine and England’s World Cup run had lifted the national mood, but this had translated into “selective spending rather than a broad retail recovery”.
“Consumers prioritised experiences, summer essentials and smaller indulgences such as beauty,” he said, adding that extreme heat had also shifted shoppers away from high streets and towards online retail.
Value remains a key factor in purchasing decisions, with promotions still “deeply embedded” in shopping behaviour, according to Found.
“The new government’s ambition to revive Britain’s high streets is timely. But delivering it will require stronger household spending power and a cost base that gives retailers confidence to invest,” he noted.
The figures come against a backdrop of improving consumer confidence. Baker noted that confidence had reached its highest level in two years, raising hopes that retail spending could strengthen as households become more optimistic.
However, she warned that this could prove short-lived as higher fuel prices and food inflation put renewed pressure on discretionary incomes this autumn.
RSM UK chief economist Thomas Pugh said retail sales had averaged 0.3 per cent month on month so far this year, compared with 0.1 per cent in 2025, suggesting the July decline should not necessarily be interpreted as a broad collapse in consumer spending.
He said households still had scope to spend, with the savings ratio remaining high, but warned that rising energy costs, a weak labour market and slowing pay growth could create a tougher backdrop in the second half of the year.
“However, households have so far been unbothered by higher energy prices, and the savings ratio is high which means households still have room to spend a bit more despite elevated inflation,” he added.
With the golden quarter approaching, retailers will now be looking to convert improved consumer confidence and seasonal events into sustained spending.
“With only a third of the year left, retailers are now focused on setting themselves up for success in the all-important golden quarter that takes in Halloween, Black Friday and – most crucially of all – Christmas,” Parr said.