UK retail sales slow as consumers put the brakes on discretionary spending

The value of retail sales increased by just 1% in the month of May, representing the lowest growth rate seen in 2025 – well below the 2.5% average seen between January and May, according to the latest BRC-KPMG retail sales monitor.

Food sales during the period jumped 3.6% year on year, compared to 2.8% growth seen in the same period in the previous year.

Non-food sales dropped 1.1% during the period, while in-store non-food sales dropped 0.9%.

In more bad news for non-food and apparel retailers, online non-food sales dropped 1.5% in the period, compared to 1.5% growth for the same period in 2024.

Online penetration rates remained flat at 35.9% in May, matching 35.9% in May 2024.

BRC chief executive Helen Dickinson said: “Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence. Gaming bucked the trend, thanks to some popular new releases. Food sales remained solid as the month saw the conclusion of football tournaments and two bank holidays, prompting spending on BBQs and picnics.

“Retailers are grappling with the £5bn in extra costs from higher National Insurance contributions and wages, which kicked in during April. They also face an additional £2bn later this year from new packaging taxes and remain concerned about the consequences of the Employment Rights Bill. Ensuring the new Bill supports workers’ rights without undermining retailers’ ability to continue to provide jobs and investment in people will determine whether Government achieves economic growth across the country or not.”

KPMG UK head of consumer, retail & leisure Linda Ellett said: “While the sunshine continued, the pace of retail sales growth didn’t in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises. But May still saw slight growth, driven mainly by food and drink, with non-food purchases falling overall.

“Travel demand for the summer months ahead looks healthy, so retailers will be hoping June sees an upturn in related spending as people begin to think about what they want to pack in their suitcase.”