UK Retail Trends – Summer 2025
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The first five months of 2025 for the retail sector have been defined by a stark contrast between on-the-ground spending and future uncertainty in supply and demand.
Day-to-day consumer financial confidence has continued to recover, and overall spending has improved. Shoppers are wary about the future and are not oblivious to the uncertainty that global events in the first half of 2025 may have on their finances. But, with little of that currently making its way into the system, the good weather and continued growth in real incomes have seen spending patterns improve for most categories.
However, with inflation climbing in core CPG areas once more, and any additional friction in global trade and supply only likely to add to this, there is awareness within the sector that this may be a brief honeymoon ahead of a tougher second half.
Uncertainty-creating global events have clashed with improved confidence and spending in the first half of 2025.
Nick Carroll, Director of Retail Insight
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KEY FINDINGS
- Growth beats expectations in Q1, but the first months of 2025 add significant uncertainty
- Graph 1: change in UK GDP (real terms), by quarter, 2023-25
- Steady recovery in day-to-day confidence continues
- Graph 2: the financial wellbeing index, 2019-25
- Early months of 2025 bring stronger demand for retailers
- Graph 3: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Online sales mixed as better weather brings shoppers onto the high street
- Graph 4: online sales as a percentage of all retail sales, 2022-25
- Bigger-ticket recovery begins, but much ground to be made up
- Graph 5: major store-based household goods retail category sales (excluding fuel), non-seasonally adjusted year-on-year performance by value, 2025
- Grocery sector feels the pressure of inflation
- Graph 6: all grocery retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Demand falls away from the specialists BPC market
- Graph 7: all store-based health and beauty retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
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MARKET ENVIRONMENT AND CONSUMER SENTIMENT
- Market environment
- Growth beats expectations in Q1…
- Graph 8: change in UK GDP (real terms), by quarter, 2023-25
- …but Q1 also adds significant uncertainty
- Real income growth continues
- Graph 9: real wages growth, annual % change in wage growth vs inflation, 2021-25
- A closer relationship with the EU should provide some inflationary relief
- Graph 10: headline inflation and inflation in key consumer goods categories, 2025
- Consumer sentiment
- Steady recovery in day-to-day confidence continues
- Graph 11: the financial wellbeing index, 2019-25
- Market remains highly polarised but we are seeing a broader-based recovery
- Graph 12: ‘how does your own financial situation compare to how it was a year or so ago?’, by household income, 2025
- Future financial confidence hits the highest point in over two years despite uncertainty
- Graph 13: the financial confidence index, 2019-25
- Retail rocked by cyber attacks
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UK RETAIL SALES
- Retail sales performance
- Early months of 2025 bring stronger demand for retailers
- Graph 14: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Later-falling Easter helps address volume decline in grocery
- Graph 15: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, by core category, 2024-25
- Retail not at the front of the queue for additional spending
- Number actively saving and reducing debts climbs
- Graph 16: recent and planned financial activity, May 2024
- Graph 17: recent and planned financial activity, May 2025
- The interplay between stores and online
- Online sales grow in 2025…
- Graph 18: all online sales, value non-seasonally adjusted, year-on-year performance, 2024-25
- …but penetration dips overall in the early months of 2025
- Graph 19: online sales as a percentage of all retail sales, 2022-25
- Stronger footfall drivers store-based online sales
- Graph 20: share of online sales, by type of retail operation, 2022-25
- Share of non-food sales coming through stores flat so far in 2025
- Graph 21: estimated share of total non-food sales, store versus online and other non-store, 2024-25
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GROCERY SHOPPING BEHAVIOUR
- Grocery sector feels the pressure of inflation
- Graph 22: all grocery retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Opportunities for health and going bold to combat out-of-home
- Graph 23: attitudes towards evening meals, 2025
- Single-use vape bans comes into effect and retailers need to lead on education
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NON-FOOD SHOPPING BEHAVIOUR
- Store-based non-food continues to see a recovery
- Graph 24: all non-food store-based retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Fashion
- Slight up-tick in fashion demand but market remains tough
- Graph 25: all store-based fashion retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Number of fashion items purchased improves, driven by higher earners
- Graph 26: outerwear items purchased in the last three months, 2024-25
- Graph 27: fashion items purchased in the last three months, 2024-25
- Footwear at the forefront for heightened supply chain awareness
- Home
- The home market is now seeing sustained recovery
- Graph 28: all store-based household goods retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Bigger-ticket recovery begins, but much ground needs to be made up
- Graph 29: major store-based household goods retail category sales (excluding fuel), non-seasonally adjusted year-on-year performance by value, 2025
- Refurbished and second-hand will be in line for further growth should inflation tick-up
- Health and beauty
- Demand falls away from the specialists BPC market
- Graph 30: all store-based health and beauty retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2024-25
- Direct purchasing ticks up
- Graph 31: beauty tracker, shopping behaviours in the last three months, 2024-25
- Mix-and-match gift sets a key opportunity ahead of Q4
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LAUNCH ACTIVITY AND INNOVATION
- Superdrug expands online marketplace to include fashion brands
- Tamara Sender-Ceron, Associate Director – Fashion Retail
- Morrisons tests aisle roaming bots to check products
- Emily Viberg, Senior Retail Analyst
- ASOS launches next-day locker delivery
- Bridget McCusker, Retail Analyst
- Pets at Home introduces new in-store subscription service
- Sam Nguyen, Senior Retail Analyst
- JD.com launches new retailer JoyBuy into the UK
- Nick Carroll, Director of Retail Insight
- Lidl pilots click, reserve and collect on middle aisle deals for loyalty members
- Steven Mayles, Retail Analyst
- IKEA acquires former Homebase units for new small-format stores
- Sam Nguyen, Senior Retail Analyst
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SPECIAL FOCUS: IKEA DEBUTS ON OXFORD STREET
- An icon arrives at an iconic location
- A convenient experience
- IKEA gives a nod to history while celebrating its modern self
- A store that represents modern London
- IKEA everywhere
- Reducing friction at every step
- Be bold and be rewarded
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FURTHER RESOURCES
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