UK Retail Marketbeat Reports

For the data behind the commentary, download the full Q1 2025 UK Retail Report.

The UK retail sector in the first quarter of 2025 continues to show signs of resilience and cautious optimism. Retail sales volumes have been gradually recovering, closely tracking the upward trend in consumer confidence since the lows of 2020. This recovery is underpinned by a more stable economic environment and a return of consumer spending, particularly in key urban and tourist-driven locations.

Performance Across Retail Formats

Retail warehouse parks remain the standout performers in the sector, consistently attracting strong footfall and maintaining robust performance metrics. These formats have proven particularly resilient due to their accessibility and tenant mix. Meanwhile, shopping centres and high street locations are showing early signs of stabilization. Prime high street areas, especially in major cities, are beginning to see renewed interest from both consumers and retailers.

Regional Trends and London’s Resurgence

London continues to be a central hub for retail activity, buoyed by a resurgence in international tourism. Forecasts suggest that international tourist spending in the capital will rise significantly through 2030, with iconic retail destinations such as Regent Street, Bond Street, Oxford Street, and Sloane Street leading the charge. Outside of London, the South East region is outperforming the rest of the UK in terms of standard retail rents, reflecting stronger local economies and consumer demand.

Sector-Specific Insights

Certain retail categories are outperforming others. Health, wellness, and beauty products are seeing strong demand, alongside luxury goods and food, beverage, and leisure offerings. Homeware and gifting also remain resilient, supported by lifestyle trends that emphasize home improvement and personal well-being. Fashion and footwear are recovering more slowly but are benefiting from increased footfall in prime locations.

Investment Market and Yields

Investor sentiment in the retail sector is cautiously optimistic. Prime yields have remained relatively stable across most retail segments, with retail parks and London high street assets attracting the most interest. Transaction volumes in Q1 2025 show a modest increase compared to the previous year, suggesting that investors are beginning to re-engage with the market as economic conditions improve.