Retail activity showed strong signs of recovery in June 2025, with sales volumes rebounding by 0.9 percent (0.5 percent below the consensus forecast) after a sharp 2.8 percent decline in May. The warm weather played a key role in boosting consumer demand, particularly in food stores and fuel stations, where volumes increased by 0.7 percent and 2.8 percent, respectively. Online retailers also capitalised on seasonal promotions, pushing non-store sales to their highest point since February 2022.

However, while total volumes rose 1.7 percent year-over-year (0.1 percent below the consensus), they remained 1.6 percent below pre-pandemic levels, underlining an incomplete recovery in the retail sector. Non-food stores posted a modest 0.2 percent monthly increase, as declines in household goods and second-hand retailers offset gains in clothing and department stores, likely due to lower in-store foot traffic. Online spending increased by 2.3 percent month-over-month, accounting for 27.8 percent of total retail sales, a subtle but notable rise from May's 27.4 percent.

While the sector shows resilience, the uneven performance across categories reflects the continued influence of consumer habits shaped by weather, online trends, and post-pandemic economic shifts. These updates take the RPI to minus 3 and the RPI-P to minus 15. This indicates that by adjusting for prices, economic activities are now behind met by market expectations in the UK.

Sales expected to rebound by 1.4 percent on the month in June after dropping 2.7 percent in May. Year on year sales seen up 1.8 percent after declining by 1.3 percent in May.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.