By Amber Murray

Copyright cityam

Retail sales were bolstered by good weather and rising real incomes this summer, but the struggling sector is looking ahead to the festive season for a bigger boost.

Sales fell by 0.1 per cent in the three months to August 2025 when compared with the three months to May 2025, according to the Office for National Statistics, following a 1.5 per cent drop in the three months to July.

Falls in automotive fuel and computer and telecoms equipment stores were “partly offset” by increases in non-store retailing and clothing stores, the ONS said.

Erin Brookes, European retail and consumer lead at Alvarez & Marsal, said the figures round off “a mixed summer of consumer spending”.

“Consumer confidence, particularly in personal finances, appears to be improving, but speculation about tax rises casts a shadow over the all-important golden quarter,” she added.

Last Autumn’s Budget brought bad news for the high street, with a significant increase in employer’s National Insurance contributions adding £2bn in costs for the sector.

The sector has been struggling with low spending, the move to online shopping, and the ever-growing experience economy.

Around 10 per cent of all jobs in retail have disappeared in the last 10 years.

“Even if this sales growth continues, it would not be nearly enough to mitigate the mass of costs hammering the industry since last year’s Budget… business confidence remains weak,” Dr Kris Hamer, director of insight at the British Retail Consortium, said.

Retailers look to the golden quarter

As the festive season approachers, retailers are hoping the all-important golden quarter will provide a bigger boost.

“With shoppers planning ahead, the challenge for retailers is to turn early demand into lasting momentum,” Deann Evans, managing director, EMEA, at Shopify, said.

Matt Dalton, consumer sector leader at Forvis Mazars, warned that consumers are becoming “more selective” in their spending.

“Despite some improvements in household finances, due to rising real incomes, consumer confidence remains cautious.

“The labour market is cooling, and many consumers are worried about the economic outlook, leading them to be more selective and tactical in their spending,” he said.