The latest data from the British Retail Consortium shows that total retail sales increased 1.3% year on year in July, against growth of 2.5% for July 2025. This was below the 12-month average of 1.8%.
Food sales increased 3.8% – holding steady against the 3.9% achieved last July, and up on the 12-month average of 3.4% – but non-food sales declined by 0.7%, against 1.4% growth in July 2025.
Online sales continued to pick up the slack for declining in-store footfall. While in-store non-food sales decreased by 1.9%, online non-food sales increased by 1.3%, and the overall online penetration rate (the proportion of non-food items bought online) increased 1.5% to 35.9%. This is below the 12-month average of 38%, but demonstrates the extent to which omnichannel retail is increasingly embedded in the purchasing journey.
Taken together with the data for July from BDO’s High Street Sales Tracker, the measures suggest consumer spending remains subdued, particularly in non-food, although discretionary categories have received a boost from events such as the World Cup.
“A challenging start to the second half”
Helen Dickinson, chief executive at the BRC, said that the ongoing heatwave has had a negative impact on sales. “Consumer demand has struggled in the heat, leaving retailers facing a challenging start to the second half of the year,” she said. “Household budgets remain stretched, consumer confidence is fragile, and retailers continue to grapple with rising operating costs.”
She reiterated the importance of government support for the sector: “If the Government wants to drive growth and keep inflation under control, it must reduce the cost of doing business by tackling the taxes and regulatory burdens that are holding back investment and putting upward pressure on prices. These include business rates, new packaging taxes, and the rising costs of employment.”
Renewed pressure on budgets
Commenting on the results, Sarah Bradbury, CEO,at IDG, said that, despite the “welcome uplift in shopper confidence”, challenges lie ahead. “Despite this month’s improvement, pressures are building across the food supply chain as a result of the conflict in the Middle East and prolonged hot weather, increasing the likelihood of higher food costs and renewed pressure on household budgets as we move into the autumn,” she said.
Richard Nolan, chief operating officer at Epos Now, said the figures show consumers are “thinking harder about every pound.” He added: “Businesses need a clear, real-time view of what’s selling, where demand is shifting and where margins are being squeezed, so they can make faster decisions on stock, pricing and promotions. The retailers that win in this environment won’t necessarily be the biggest. They’ll be the ones that can adapt fastest, using technology and data to stay close to their customers and turn cautious spending into long-term loyalty.”
The message from July is clear: online remains central to growth, but it cannot fully compensate for weaker demand on the high street. With fresh cost pressures looming, retailers will be hoping for stronger consumer confidence as they head into the crucial autumn trading period.
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