The UK retail sector showed renewed momentum in September 2025, extending its recovery streak for the fourth consecutive month. Sales volumes rose by 0.5 percent month-over-month and 1.5 percent year-over-year, reaching their highest level since July 2022. Growth was driven largely by non-food retailers, particularly computer and telecommunications stores, which recorded strong performance as consumers increased spending on technology. Online retail also gained traction, with jewellers benefiting from robust demand for gold, an indicator of consumer confidence and possibly investment sentiment amid economic uncertainty.

Weather played a notable role, as favourable summer conditions in July and August boosted clothing sales across the quarter. Overall, retail volumes rose by 0.9 percent in the third quarter 3, signalling resilience in household spending. Meanwhile, sales values increased by 1.4 percent monthly and 5.6 percent annually, reflecting both higher prices and growing demand. Online sales accounted for 28 percent of total spending, up slightly from August, revealing the continued strength of digital commerce.

The consistent upward trend across both physical and non-store channels suggests that consumer sentiment is stabilising, supported by improved purchasing power and seasonal spending patterns heading into the final quarter of 2025. This latest update takes the RPI to minus 1 and the RPI-P to 15, meaning that adjusted for prices, economic activities are now slightly above the expectations of the UK economy.

Sales expected down 0.2 percent on the month in September after rising 0.5 percent in August. On year, the consensus sees sales up by a sluggish 0.7 percent again after rising 0.7 percent in August on year.

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.