Retail sales fall for the first time in three months as World Cup buzz fades

See more This is Money on Google - save us as a Preferred Source Updated: 03:34 EDT, 21 August 2026 Retail sales slipped in July as a steep decline in clothing sales failed to offset higher spending on drinks during the World Cup.The Office for National Statistics (ONS) said retail sales volumes fell by 0.5 per cent in July, compared with the previous month.It follows a rise of 0.7 per cent in June, which had been revised down from a previous estimate of 1 per cent.It marks the first time in three months that retailers have seen a fall in sales, with July's decline higher than the 0.4 per cent fall expected by economists.The ONS said non-food sales weakened after retailers brought forward summer promotions to June to take advantage of the hot weather, leaving fewer discounts available in July.Sales of clothing and footwear slumped by 2.7 per cent last month, the steepest monthly fall since last May, while household goods dropped 1.9 per cent.The weakness more than outweighed a 0.5 per cent rise in food sales as the warm weather continued to support supermarket spending. Retail sales dropped by more than expected in July as a slump in clothing outweighed higher drinks spendingRetailers selling alcoholic drinks also 'performed well' due to the heatwaves and final stages of the World Cup, the ONS said.ONS chief economist Grant Fitzner said: 'Retail sales increased in the latest three months, with all main sectors, apart from motor fuel, seeing growth.'Some retailers told us that hot weather and promotions helped sales of outdoor products and items such as fans, with clothing and online sports merchandise also doing well.'Despite the monthly setback, the ONS said retail sales volumes increased by 1.1 per cent over the three months to July, compared with the previous three months.Retailers have come under pressure in recent months as higher taxes and depressed consumer spending hit their bottom lines.Jacqueline Windsor, head of retail at PwC UK, said: 'Higher inflation, notably the higher energy price cap and higher petrol prices later in the month, also meant less money in shoppers' pockets for discretionary spending outside of grocery and fuel.'Despite less promotional activity from online retailers, the high street failed to benefit as heatwaves continued to impact footfall.'Matt Swannell, chief economic adviser to the Item Club, said: 'The retail sector is likely to face a challenging H2 as households' real incomes come under further pressure.'Inflation has already started to rise in July and we expect it to increase further over the next six months, reaching 3.5 per cent before year-end.'There was some brighter news for the high street, however, as the closely watched GfK consumer confidence survey rose two points to -14, its highest level in two years, reflecting growing optimism among households about their personal finances.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you