UK Retail Sales Growth Slows to 5-Month Low

UK retail sales rose by 1% year-on-year on a like-for-like basis in July 2026, falling short of market expectations for a 1.5% gain and slowing from a 1.7% increase in the previous month. The latest figure also marked the softest growth since February, as consumers remained wary of big outlays despite support from England's run to the World Cup semi-finals and a prolonged heatwave. Food sales rose 3.8% while non-food sales declined 0.7%. Clothing sales benefited from hot weather, although footwear sales fell. Barclays' broader measure of consumer spending rose 2%, slightly faster than June's 1.9% increase, with essential spending up 2.9% and non-essential spending increasing 1.6%. Pub transactions jumped 10% during the month, supported by World Cup matches, while travel spending shifted toward domestic staycations as airline spending fell 6%. Barclays' consumer confidence measure also reached its most optimistic level about the UK economy in 21 months.

UK retail sales rose by 1.7% year-on-year on a like-for-like basis in June 2026, falling short of market expectations for a 2.9% gain, slowing from a 3.4% increase in May and marking the softest growth since February. Despite the slowdown, spending was supported by the men's FIFA World Cup and a prolonged heatwave, which boosted demand for clothing, electric fans, air-conditioning units, food and beverages, while pubs also benefited from England's matchdays. Non-food sales increased 1.2%, double their 12-month average, helped by the strongest online sales penetration of 2026 as soaring temperatures discouraged shoppers from visiting physical stores. Barclays' broader measure of consumer spending also rose 1.9%, with essential spending up 2.2%, the strongest increase in 14 months, while travel spending stabilized after earlier declines. Still, the British Retail Consortium warned that political uncertainty and the impact of the Iran conflict could weigh on spending in the months ahead.

UK retail sales increased by 3.7% year-on-year on a like-for-like basis in May 2026, exceeding market expectations for a 0.6% gain and marking the strongest growth since April 2025. The latest figure rebounded from a 3.4% decline in April, driven largely by seasonal demand during a May heatwave and the early bank holiday period. Food sales advanced 3.9%, lifted by bank holiday barbecue demand, while non-food categories, such as clothing, footwear, outdoor goods, health and beauty, and home products, rose 3.5% as warmer weather encouraged spending in outdoor and summer goods. However, travel spending fell 5.8% year-on-year for a third consecutive month, and airline expenditure dropped 12.9%. Barclays said two-thirds of respondents were adjusting their finances because of broader economic uncertainty, including concerns linked to the Iran conflict and rising living costs.