The latest figures from the ONS (Office of National Statistics) show that the retail sector has defied expectations with a strong Q3 and sales rising by 0.5% in September. This means sales in the sector have risen for four consecutive months. Economists had forecast a 0.2% drop.
Tech sales had a strong role to play in September’s figures, notably with the launch of the iPhone17, and the good weather in July and August helped to boost clothing sales. Food and drink, however, saw very little growth.
Recovery remains patchy
Although these results look positive for retailers going into the Golden Quarter, Nicholas Found, head of commercial content at Retail Economics, warned that recovery in the sector remains patchy. “Retail is increasingly a game of selective strength rather than broad recovery,” he said. “While sales are rising on the surface, retailers are trading in an environment where value, innovation and operational agility matter more than ever.
“Affordable luxuries in beauty and new tech launches in electricals are standing out, but the broader picture is one of households tightening their belts. Shoppers are taking a cautious, deliberate approach to spending, as budgets remain under pressure from essential living expenses.”
Pointing out that the Autumn Budget could still cause problems during the Golden Quarter, Found added: “Growing concerns around tax and borrowing costs are weighing on consumers’ spending intentions, prompting fiercer competition for limited discretionary spend.”
Festive shopping boom expected
Shopify’s managing director EMEA, Deann Evans, struck a more positive note. “According to our Shopify data, seasonal celebrations were already firmly on the radar of UK consumers in September, with sales of advent calendars up by 174%, wreaths by 94% and holiday ornaments by 78% compared to the month prior,” she said. “This is corroborated by findings from our 2025 Holiday Retail Report that almost a third (29%) of British consumers expect to start their festive shopping earlier this year.
“With a consistent few months of growth in UK retail sales, optimism will be high heading into peak shopping season. Indeed, according to our new Holiday Retail Report, 80% of UK businesses are expecting higher sales this holiday shopping season compared to last year. Consumer confidence is also strong, with planned seasonal spend in the UK up from £159 last year to £181 in 2025.”
Pricing and customer service are key
However, Evans agreed with Found that consumers remain cautious. “Retailers shouldn’t mistake this for unlimited consumer appetite,” she said. “Almost two-thirds of UK consumers (63%) have set a clear spending cap and 39% will stick to it closely. Retailers that pair sharp pricing with great service, personalised loyalty, and a fast, reliable checkout will win share and loyalty now, and set themselves up for growth into the New Year.”
This focus on competitive pricing and a seamless customer journey is endorsed by Erin Brookes, European retail and consumer lead at financial consultancy Alvarez & Marsal. “To build on recent gains, retailers should focus on sharpening value propositions and maintaining operational agility,” she said. “Well-timed, targeted promotions and disciplined cost management will be vital to capturing demand, protecting margins, and staying resilient through this pivotal trading period.”
While the news that retail sales have climbed for a fourth month will be welcome to retailers heading into the Golden Quarter, the challenge nonetheless will be balancing optimism with discipline – and turning seasonal momentum into sustainable growth.
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