Retail sales in August 2025 showed that volumes rose by 0.5 percent for the month, in line with the consensus and marking the third consecutive monthly increase, though they remain 2.1 percent below pre-pandemic levels. Clothing stores, butchers, bakers, and online retailers benefitted from dry weather and stronger footfall, while declines persisted in automotive fuel, computer and telecoms equipment, and some second-hand goods outlets.

Compared with August 2024, volumes were up by 0.7 percent, showing that annual growth has returned despite lingering sectoral weaknesses. Spending also gathered momentum as online values rose 3.4 percent year-over-year, reinforcing the digital channel's steady pull. Total sales values increased 0.6 percent in August, but the share of online purchases remained steady at 27.6 percent.

In sum, while retail sales have not fully regained their pre-COVID strength, the consistent monthly gains and stronger annual comparisons suggest that consumer demand is gradually strengthening, though uneven across sectors. This latest update takes the RPI to 6 and the RPI-P to 7, meaning that economic activities are within the expectations of the UK economy.

Sales expected up a robust 0.5 percent in August from July after rising 0.6 percent in July from June. On year, sales are seen up 1.5 percent in August after a yearly rise of 1.1 percent in July.

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.