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Retail sales up 0.6% in July "good on the surface but there may be deeper problems"

ended 05. September 2025

RETAIL sales rose by a stronger than expected 0.6% in July 2025, following an increase of 0.3% in June 2025, according to official data published this morning, but experts said the fall in volumes suggests there may be “deeper problems”.

The data showed the quantity of goods bought (volume) in retail sales is estimated to have fallen by 0.6% in the three months to July 2025 when compared with the three months to April 2025. This decline follows four months of consecutive three-month on three-month growth.

Non-store retailers and clothing stores sales volumes grew strongly in July 2025, which retailers attributed to new products, good weather, and an increase resulting from the UEFA Women’s EURO 2025 tournament.

David Belle, Founder and Trader at Fink Money commented: "This retail data is good on the surface but there may be deeper problems. Volumes being down suggests lots of this might have been discretionary, namely people buying one-off goods rather than upping their consistent spend. If we look at Currys PLC earnings yesterday, they were strong. Currys sell goods that people buy once every so often but tend to be required, such as computers, fridges and white goods generally.

"If we contrast their results with Jet2 earnings, their future profitability came in at the low end of analyst expectations, causing shares to fall 20%. If there is less expectation that people will go on holiday (which tends to be a frivolous spend for many) then you can deduce what their expectations of the future might be."

Meanwhile, Harry Mills, Director at London-based Oku Markets, questioned whether we should trust the ONS data: "Retail sales data tend to be choppy, with the weather often blamed or thanked for under- or overperformance; nevertheless, the monthly release from the ONS provides a near coincident indicator on the economy. As a reminder, May saw a huge monthly drop of 2.8%, with a rebound in June of +0.9%. However, the ONS has revised this rebound lower, to just 0.3%, and reported a delayed July number of 0.6%. Delayed due to the quality of its data, which may have overestimated retail sales volatility in the first half of the year.

“This morning's data reflect a modest recovery from the unexpected dip in May, but can we trust the ONS? That is the bigger question.”

2 responses from the Newspage community

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David Belle
Founder and Trader at Fink Money
This retail data is good on the surface but there may be deeper problems. Volumes being down suggests lots of this might have been discretionary, namely people buying one-off goods rather than upping their consistent spend. If we look at Currys PLC earnings yesterday, they were strong. Currys sell goods that people buy once every so often but tend to be required, such as computers, fridges and white goods generally. If we contrast their results with Jet2 earnings, their future profitability came in at the low end of analyst expectations, causing shares to fall 20%. If there is less expectation that people will go on holiday (which tends to be a frivolous spend for many) then you can deduce what their expectations of the future might be.
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Harry Mills
Director at Oku Markets
Retail sales data tend to be choppy, with the weather often blamed or thanked for under- or overperformance; nevertheless, the monthly release from the ONS provides a near coincident indicator on the economy. As a reminder, May saw a huge monthly drop of 2.8%, with a rebound in June of +0.9%. However, the ONS has revised this rebound lower, to just 0.3%, and reported a delayed July number of 0.6%. Delayed due to the quality of its data, which may have overestimated retail sales volatility in the first half of the year. This morning's data reflect a modest recovery from the unexpected dip in May, but can we trust the ONS? That is the bigger question.