UK retail sales volumes suffered their steepest monthly decline in nearly six months in May, as consumer demand tapered off following a spending surge in April, official figures revealed on Friday.
According to data from the Office for National Statistics (ONS), retail sales volumes fell by 2.7% in May — a far more severe contraction than the 0.5% decline forecast in a Reuters poll of economists. On an annual basis, sales volumes dropped by 1.3%, marking the largest year-on-year decline since April and well short of the 1.7% annual growth economists had expected.
The downturn was led by a sharp fall in spending at food retailers, with consumers cutting back on purchases of alcohol and tobacco. The ONS also noted a drop in foot traffic at clothing stores and reduced demand for home improvement items. “It was a dismal month for food retailers,” said ONS statistician Hannah Finselbach, adding that the dry weather earlier in the spring may have prompted households to bring forward their DIY purchases to April.
April’s retail figures had painted a more optimistic picture, with sales rising 1.3% thanks to sunny weather and early summer shopping, which lifted consumer sentiment. But May’s data suggests that much of that demand was pulled forward, leading to a slump last month.
Commenting on the figures, Paul Dales, Chief UK Economist at Capital Economics, said: “The sharp 2.7% month-on-month drop in retail sales volumes in May adds to other evidence that the burst of economic growth in Q1 is over. That said, consumer spending may still outperform other areas of the economy this year.”
The British pound slipped by around a quarter of a cent against the US dollar following the release of the sales data, which coincided with figures showing a larger-than-expected government borrowing deficit of £17.7 billion in May.
While the UK economy grew by a stronger-than-expected 0.7% in the first quarter of 2025, it contracted in April amid the expiry of a property tax break and the initial economic impact of new US tariffs. The Bank of England continues to forecast modest growth of around 1% for the year.
Retailer updates have also painted a mixed picture. Tesco, the UK’s largest supermarket chain, beat market expectations for its first-quarter sales, despite describing conditions as “intensely competitive.” However, budget chain Poundland announced it will close 68 stores amid weakening performance.
The British Retail Consortium had already signalled a slowdown earlier this month, attributing May’s weakness to consumers having completed much of their summer shopping in April.
