BDO: Volatile High Street Retail Sales in July

• Like-for-like retail sales grew +2.7% in July compared to the same month last year
• However, sales growth slowed down significantly in the final two weeks of the month
• Online sales performed particularly poorly in second half of July

Total like-for-like sales in discretionary categories (fashion, lifestyle and homewares) grew by +2.7% in July compared to the same month last year, according to the latest High Street Sales Tracker from accountancy and business advisory firm BDO. With sales growth just above the rate of inflation, this means that sales volumes have risen very slightly compared to the same month last year. 

In-store sales grew by +3.8% in July, recording the best performance on the high street since January. However, this is compared to a very weak base of +0.8% in July 2025 and was primarily driven by a strong start to the month, as growth flatlined to just +0.09% in the final week of July. Online sales had a similarly inconsistent month, starting very strongly but dipping into negative territory in the final week with -0.07% like-for-like sales. 

Sophie Michael, Head of Retail and Wholesale at BDO, commented: “In a month that was dominated by the World Cup, it’s not surprising that it was a month of two halves. The positive sales growth we saw in the first two weeks slowed down completely by the end of the month. We typically see some volatility in like-for-like sales across July, with the school holidays impacting retail sales over the summer, but retailers may have been taken aback at just how steep the decline in sales has been over the past couple of weeks.  

“The spell of unusually warm weather earlier in the summer is likely to have encouraged many consumers to refresh their wardrobes sooner than they normally would, leaving less demand later in the season; hence the stronger numbers we saw in May. At the same time, ongoing economic uncertainty, including concerns over interest rates and energy costs, continues to weigh on consumer confidence and discretionary spending.  

“Added to this is the backdrop of political uncertainty, with consumers and businesses awaiting the Chancellor’s first budget and the potential impact of any fiscal changes. It is therefore understandable that many households are taking a more cautious approach to spending on non-essential items.  

“One of Burnham’s first announcements in government was a business rates cut to support hospitality, and retailers may be questioning when similar measures will be introduced for a sector that employs more people than any other part of the private economy.  

“With consumer spending remaining subdued and households continuing to prioritise essential purchases over discretionary items, retailers face a particularly challenging trading environment. Against this backdrop, retailers will have to be highly strategic about how they manage their inventory levels and generate vital cashflow, whilst responding to changing consumer demand ahead of the crucial festive period. After a very inconsistent first half of the year, the coming months are likely to prove decisive in determining the health of the UK’s retail sector.”

Source: BDO

Image: William Barton / shutterstock / 1159330753

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