Retail sales decline 0.5 percent in July amid prolonged heatwave

Summer 2026 has been one of flux. The World Cup helped to lift sentiments, albeit a prolonged heatwave has started to dissuade consumers instead of motivate them, and the aftermath is now showing in the data.

According to the Office for National Statistics (ONS), retail sales volumes fell 0.5 percent in July 2026, down from an increase of 0.7 percent in June and 1.3 percent in May. In contrast, in the three months to July 2026, sales rose 1.1 percent compared to the three months to April 2026.

The hot weather kept consumers at home, meaning non-store retailers welcomed a 3 percent uptick in sales for the three month period, with online spending values rising 11 percent compared to the three months to July 2025.

On a monthly basis things were more bleak. Online sales fell 3.9 percent, down from a 2.5 percent increase in June, yet remained 6.5 percent higher compared to the same month last year. The sales volumes of non-food stores – including department, clothing, household and other categories – rose 1 percent over the three months, yet fell 0.5 percent during July alone.

Clothing stores welcomed a 0.6 percent uptick for the three months, when promotions and good weather were still boosting performance. In July specifically, these aspects began to more negatively impact sales, with hot weather reducing footfall and promotional activity dropping between July and June, contrasting with a rise in the same period last year.

A similar shift was noted by Harvir Dhillon, lead economist at the British Retail Consortium (BRC), who said sustained high temperatures since May “meant many consumers had brought forward much of their summer spending earlier in the season”.

“Footwear and household goods struggled, while clothing provided a bright spot as shoppers continued to seek out affordable summer essentials to cope with the ongoing heat,” Dhillon added.

Erin Brookes, European retail and consumer lead at Alvarez & Marsal, said the slowdown in sales was “not unsurprising” and that the prolonged hot weather has “started to work against retailers, keeping shoppers away from the high street and concentrating spending on a narrower range of seasonal purchases”.

“The question now is whether this is simply a late-summer lull or a sign of more cautious spending to come,” Brookes said, adding retailers were already finding it difficult to decide on when to bring in autumn and winter ranges.

Similarly, Andrew Carlisle, consumer goods, retail and travel lead at Accenture UK & Ireland, also pointed to a shift in traditional seasonal patterns that he said have “become less reliable”, meaning retailers “need greater flexibility in how they forecast demand, manage inventory and respond to sudden shifts in spending”.

Many analysts suggest that the government needs to step in to help by addressing expenses. “For retailers, operating costs remain high, leaving limited room to absorb further increases without putting investment, jobs and prices under pressure,” the BRC’s Dhillon said. “If the government is serious about delivering growth while keeping the cost of living under control, it must reduce the cost of doing business. This means tackling the growing burden of business rates, packaging taxes and employment costs.”