Retail sales in the UK increased by 2.3 per cent Y-o-Y in September 2025, as per a joint report by the British Retail Consortium (BRC) and KPMG.

As per the report, this growth rate was slower than the 3.1 per cent recorded in August, indicating a cooling of consumer spending as households exercised greater caution.

The growth in the value of sales was often due to higher prices (inflation) rather than an increase in the volume of goods purchased. Data from Barclays also shows, overall consumer card spending actually declined by 0.7 per cent Y-o-Y in September.

Non-food sales increased by a meager 0.7 per cent Y-o-Y during the month, which was well below the 12-month average.

This cautious consumer behavior was linked to a mix of economic and seasonal factors including the looming Autumn Budget (scheduled for November) and fears of potential tax increases that weighed heavily on consumers' minds as they plann their budgets, especially for Christmas spending.

Unseasonably mild temperatures across the UK led shoppers to delay purchases of autumn and winter clothing and footwear, directly impacting the non-food sector. Consumers also remain highly selective, prioritizing ‘pick-me-up’ purchases in categories like furniture, clothing, and beauty, while making broader cutbacks in essential spending, which declined by 2.6 per cent Y-o-Y according to Barclays.

The data suggests that while the retail sector is still showing growth in monetary terms, the underlying spending behavior is becoming increasingly cautious and targeted due to persistent inflationary pressures and economic uncertainty.