What: UK retail sales growth slowed to just 0.7% in the four weeks to August 29, as a cooling in discretionary spending and a fading heatwave-driven boost ended the summer on a weak note.

Why it is important: With big-ticket categories declining and shoppers trading down to smaller indulgences, retailers face a more selective, cost-conscious consumer heading into the critical Black Friday and holiday trading period.

Total UK retail sales increased by just 0.7% in the four weeks to August 29, according to the BRC-KPMG retail sales monitor, below the 12-month average of 1.6% and down sharply from 3.1% growth in August 2025. Food sales rose 2.6%, also below their 12-month average, while in-store non-food sales fell 1.2% year on year and online non-food sales dipped 0.2%. Online penetration nonetheless crept up to 36.4%, from 36% a year earlier.

BRC lead economist Harvir Dhillon called August "a disappointing month," noting that rising household bills pushed shoppers to tighten spending, particularly on big-ticket items like furniture and household appliances, while smaller indulgences in health and beauty held up. He linked the slowdown directly to the upcoming autumn Budget, urging government action on business rates and energy costs.

KPMG's Linda Ellett added that this year's summer spending was pulled forward into May by early heat, meaning retailer focus has now shifted to back-to-school and Q4/Black Friday planning.

IADS Notes: The softening in August value growth follows a similarly weak survey-based reading, as the CBI's retailer-reported sales balance fell to -48 that month from -26 in July even as investment intentions and hiring plans showed tentative stabilisation (Retail Week, August 2026). The demand slowdown is occurring alongside accelerating cost pressure: shop price inflation hit 1.5% annually in August, its fastest pace in over two years, as rising energy costs pushed up food prices and AI-driven chip demand lifted electronics prices (Reuters, September 2026) — a dynamic that helps explain why shoppers pulled back on big-ticket discretionary purchases while sustaining spend on smaller indulgences. The BRC's call for business rates and energy cost action ahead of the autumn Budget also echoes an earlier warning from UK retail bodies that a rates hike could put more than 100,000 retail jobs at risk and stall store expansion plans (Retail Week, October 2025).

UK retail sales cool as blazing hot summer ends