UK total retail sales increased by +3.1% year-on-year in August – growing above the 12-month average of +2% – data from the BRC-KPMG Monitor reveals, as sunny weather and an interest rate cut helped boost spending.

Food sales increased by +4.7% compared to 2024 last month, +1.4% percentage points above the average growth over the past year, however much of this growth can be attributed to price increases rather than additional volume.

“Sunny weather and an interest rate cut helped August round off a solid summer of sales,” said Helen Dickinson, Chief Executive of the British Retail Consortium.

Non-Food sales increased by +1.8% year-on-year in August, with computing, gaming and furniture among the top performers. Back-To-School clothing sales didn’t perform as well as expected, with some families turning to second-hand purchases for school uniforms, rather than opting to buy new.

“Retailers will be reflecting on their summer performance and what has and hasn’t sold well, as they plan their stock levels for the final ‘golden’ quarter of the year that includes Black Friday and Christmas,” commented Linda Ellett, UK Head of Consumer, Retail & Leisure at KPMG.

However, despite the uptick in sales in August, retailers will be looking ahead to the Golden Quarter with an air of caution, said Dickinson, with concerns over potential further tax hikes in the late Autumn Budget – now set for November – top of mind.

“Retailers approach the Golden Quarter with caution. With the later-than-expected Budget falling just days before Black Friday, many are uneasy about how consumer confidence and spending could be impacted by tax rise speculation in the run-up to Christmas.”

Helen Dickinson, CEO, BRC

With consumer confidence remaining shaky, “the emotional weight of rising energy bills and fears of tax hikes in the Autumn Budget are adding to the strain,” added Sarah Bradbury, CEO of IGD.

“Yet, there are glimmers of relief,” Bradbury added. “Interest rates have been cut again and mortgage rates are easing, offering some financial respite. While volumes remain under pressure, financially resilient shoppers may remain more confident, even as they brace for a challenging winter.”