Retail sales rise — but uncertainty remains
Retail sales rise — but uncertainty remains ahead of the “golden quarter”
Retailers saw a welcome lift in August, helped along by warm weather, back-to-school spending and the recent Bank of England interest rate cut. But while the numbers look positive, business confidence tells a more cautious story.
According to the latest British Retail Consortium (BRC) and KPMG survey, total sales rose 3.1% year-on-year in August — building on 2.5% growth in July and 3.1% in June.
Where the growth came from
Food and drink led the way, up 4.7%, though much of that rise came from higher prices rather than stronger volumes. Inflation continues to squeeze household budgets, especially for everyday staples like beef, chocolate and coffee.
Non-food categories also performed well, rising 1.8% overall — the third consecutive monthly increase. Furniture sales picked up again, and there were solid gains for DIY, household goods and gardening products.
Tech sales were another bright spot, boosted by back-to-school purchases and the launch of new
Samsung foldable phones and
Google’s Pixel 10.
What’s next for retail
Despite this positive momentum, many retailers remain nervous about the months ahead.
Consumer confidence has now
fallen for three straight months, with shoppers expecting further food price increases and tighter household budgets. The BRC has also warned that speculation around possible tax rises could dent spending as we move into the critical
pre-Christmas trading season — often called the “golden quarter”.
This period accounts for a significant share of annual sales for many retailers, so any dip in confidence could have real consequences.
What it means for your business
If you’re running a retail or consumer-facing business, this is a good time to keep a close eye on your cashflow, margins and inventory planning.
Warmer weather and one-off boosts like tech launches can lift sales temporarily — but sustainability comes from clear financial visibility and flexible forecasting.
The next Budget, due on 26 November, may bring more clarity on taxation and spending. Until then, retailers should plan cautiously, track performance closely, and stay adaptable to shifting consumer habits.
