UK Retail Marketbeat Reports

For the data behind the commentary, download the full Q2 2025 UK Retail Report.

Resilience in Retail: Market Momentum Continues into H2 2025

Following a standout year in 2024, sustaining momentum was always going to be a challenge. Yet, six months into 2025, the market continues to demonstrate remarkable resilience. Prime occupier locations remain in high demand, with supply tightening across top schemes and key retail streets. This contraction, paired with sustained occupier interest, signals continued strength in the sector.

Improved consumer market conditions have boosted retailer confidence, and as we enter the second half of the year, attention turns to potential interest rate cuts and inflation trends. Meanwhile, the investment market remains buoyant—underpinned by solid fundamentals, stabilising economic conditions, and renewed investor sentiment. Notably, investors who had previously scaled back exposure are now re-engaging with the sector.

However, retailers are navigating a complex cost landscape following April’s policy changes. The removal of business rates relief, increases in national insurance contributions, and a rise in the national minimum wage have created a trifecta of structural cost pressures. These changes are directly impacting profitability and influencing real estate strategies across the retail and leisure sectors.

The recent announcement and speculation around a potential shift away from upward-only rent reviews has sparked mixed reactions. For new entrants, the move could offer protection against over-renting, potentially broadening occupier demand and easing occupational costs. Conversely, landlords face uncertainty around future income streams, which may lead to reduced investment in tenant improvements or a shift towards leases structured outside the Landlord and Tenant Act 1954.