UK retail sales up 1.9% as online share hits 2026 high
A June heatwave drove UK shoppers online and emptied high streets, underscoring a structural shift in retail that investors must weigh against persistent operational and tax pressures.
UK retail sales increased by 1.9% year-on-year in the five weeks to July 4, 2026, according to the British Retail Consortium and KPMG. While this matched the 12-month average, it represented a significant slowdown from the 3.1% growth recorded in June 2025. The headline figure masked a stark divergence between physical and digital channels as record-breaking temperatures kept consumers away from shops.
Non-food sales grew by 1.2% overall, beating the annual average of 0.6%. However, that aggregate gain was entirely driven by digital, as physical store non-food sales contracted by 1.1% against the same period last year. High street footfall dropped 6.2%, a sharp acceleration from the 1.5% decline seen in May, while shopping centre visits fell 2.5%.
Online non-food sales surged 5.1%, well above the 1.5% average of the past year. The digital channel accounted for 39.0% of all non-food purchases, up from 37.7% a year earlier and the highest share recorded in 2026. BRC chief executive Helen Dickinson attributed this spike to well-timed promotions.
For market professionals, this weather-driven shift underscores the increasing vulnerability of physical retail footprints and the premium on robust e-commerce logistics. Yet the digital boom brings its own logistical and cost strains. "A heatwave doesn't just change how customers shop – it makes retail operations more challenging, from keeping shelves stocked to keeping products and people cool," Dickinson said.
These operational hurdles compound an already difficult macroeconomic environment for the sector. Dickinson warned that rising business rates, higher employment taxes and ongoing global uncertainty are "squeezing retailers' ability to invest, create jobs and keep prices down." She urged the incoming government to adopt a coordinated policy approach to help the sector realise its full potential.
Despite these margin headwinds, underlying consumer demand for discretionary items appears intact. KPMG's head of consumer, retail and leisure, Linda Ellett, pointed to rising clothing sales for both adults and children during the month. Retailers will now look to sustain that momentum as the summer holiday season gets fully underway.
