Retail sales volumes are estimated to have fallen by 0.5% in July 2026, according to the office for National Statistics. This follows a rise of 0.7% in June 2026, and a rise of 1.3% in May 2026 . Non-food stores and non-store retailers fell back in July, which retailers attributed to demand being brought forward to June because of earlier than usual promotional activity.
The quantity of goods bought (volume) in retail sales is estimated to have risen by 1.1% in the three months to July 2026, compared with the three months to April 2026. Non-store retailers’ sales volumes rose, attributed to promotions, sports merchandise and the weather boosting sales of items such as fans. Supermarkets’ sales volumes also performed well in the hot weather, alongside sales of alcoholic drinks and beverages.
Cande Cooper, retail partner at Deloitte, said: “After a positive couple of months of sales growth, volumes softened in July as some of the ‘easy wins’ ran out for retailers. Consumers have not stopped spending, but the boosts from weather, events and summer demand are now fading.
“Retailers now have to work harder to win discretionary spend from value-conscious consumers as many are being much more selective about where they spend their hard-earned cash – increasingly choosing convenience, value and experiences over a trip to the high street. While consumer confidence continues to recover, we are yet to see the willingness to make discretionary purchases improve at the same pace.”
Jacqui Baker, partner and head of retail at RSM UK, said: “Retail was not a World Cup winner, with many opting to cheer on England from the pub and prioritising their summer getaway, boosting hospitality and travel rather than retail sales. Consumers splashed out on fans and food for barbeques due to the heatwave, with many avoiding soaring temperatures on the high street.
“Individuals are still being extremely selective about where they choose to spend. Consumers are continuing to prioritise value and remain particularly cautious around big-ticket items, so there are clear winners and losers in retail rather than increases across the board.
“That said, consumers will spend if there’s a compelling enough reason or occasion. The challenge for retailers is not simply capturing more consumer spend, but understanding what is driving it. With consumer confidence increasing to its highest in two years, the hope is that the boost to retail returns as people slowly start to feel more optimistic.
“However, this may be short-lived as consumers’ discretionary income comes under renewed pressure due to higher fuel prices and food inflation this autumn.”
Thomas Pugh, chief economist at RSM UK, added: “Retail sales falling in July suggests that the weather may have prompted consumers to stay inside or switch spending towards hospitality given England’s World Cup run.
“Looking through the dip in July, we see little sign that consumers are curtailing spending in response to the conflict in the Middle East. Retail sales have averaged 0.3% m/m so far this year, compared to 0.1% in 2025. What’s more, consumer confidence rose to a two-year high in August, suggesting that consumers remain unfazed about renewed tensions in Iran and the risk of another tax raising Budget in the autumn.”
“Admittedly, the big test for consumers is yet to come. Rebounding oil prices have caused fuel prices to rise a little and based on current energy prices, utility bills will rise again in October. At the same time, the labour market remains weak and pay growth is slowing, especially in the private sector, which mean real incomes are likely to stagnate in the second half of the year. That creates a much tougher backdrop for consumer spending in H2. However, households have so far been unbothered by higher energy prices, and the savings ratio is high which means households still have room to spend a bit more despite elevated inflation.”
Hai-Ly Nguyen, associate partner at McKinsey & Company, comments: “July’s monthly fall looks less like a collapse in demand, but more of a timing effect of the heatwave and previous promotions pulled forward into June. The heatwave suppressed
“That spending pattern is consistent with what we see in McKinsey’s latest consumer research. More than three-quarters of consumers are still engaging in trade-down behaviour, and many are actively avoiding large or expensive purchases. Rather, they are redirecting their spending
“The channel mix matters too. Online share of retail fell back to 28.3% in July, but remains structurally elevated and in categories such as apparel and beauty, where consumers increasingly use AI tools to compare and narrow choices before they buy, being visible upstream of checkout is becoming as important as in-store presence.”
