Consumer demand cools as summer ends
Covering the 4 weeks from 2 – 29 August 2026
- UK Total retail sales increased by 0.7% year on year in August, against growth of 3.1% in August 2025. This was below the 12-month average growth of 1.6%.
- Food sales increased by 2.6% year on year in August, against growth of 4.7% in August 2025. This was below the 12-month average growth of 3.2%.
- Non-Food sales decreased by 0.8% year on year in August, against growth of 1.8% in August 2025. This was below the 12-month average growth of 0.2%.
- In-Store Non-Food sales decreased by 1.2% year on year in August, against growth of 1.3% in August 2025. This was below the 12-month average decline of 0.4%.
- Online Non-Food sales decreased by 0.2% year on year in August, against growth of 2.7% in August 2025. This was below the 12-month average growth of 1.3%.
- The online penetration rate (the proportion of Non-Food items bought online) increased to 36.4% in August from 36.0% in August 2025. This was below the 12-month average of 38.0%.
Harvir Dhillon, lead economist at the British Retail Consortium, said: “August was a disappointing month for retail sales. Despite pockets of growth, particularly in some food categories, overall performance was below the average for the past year. With the cost of households bills rising, and set to rise further, many shoppers have clearly been tightening their belts. This was particularly true for discretionary spending, as big-ticket purchases like furniture and household appliances declined and consumers opted to instead treat themselves to smaller luxuries in health and beauty.”
“As summer spending cools, all eyes turn to the Autumn Budget. Retailers are being hit by a double whammy of rising costs and slowing consumer demand. The new government has put high streets at the centre of their vision for better economic growth and the upcoming Budget is an opportunity to deliver on this commitment. Taking action on business rates and energy costs would help support retail investment in local communities while delivering value for consumers.”
Linda Ellett, UK head of consumer, retail & leisure, KPMG, said: “Despite temperatures remaining high, summer season cooled off for retail sales in August.
“Summer spending started in May this year, as earlier higher temperatures pulled forward related purchases. And while the heat and holiday spending continued to drive food, drink, health and beauty sales into August, most other categories couldn’t sustain another month of growth. This resulted in a largely flat month for non-food goods overall.
“Retailer focus has now moved to back to school, with planning for the final quarter of the year and the lead-in to Black Friday month underway.”
Sarah Bradbury, CEO, IGD, said: “High temperatures in August kept shopper confidence on an even keel, with grocery sales and volumes both higher than last year. The news that food inflation is at its lowest level for two years meant that shopper concerns around rising food prices dipped a little. However, reports of the upcoming increase in the energy price cap and uncertainty in the geo-political environment contributed to shoppers’ focus beginning to shift to other financial pressures, such as possible tax or benefit changes. Ahead of the Autumn Budget, food and drink businesses should expect shoppers to be sensitive to a range of topics that could impact their finances and therefore, their ability and willingness to spend more.”