Retail sales in the UK fell by 2.7 per cent in May, marking the steepest monthly decline in a year and a half, according to figures released by the Office for National Statistics (ONS) on Friday. The drop significantly exceeded economists’ expectations and contrasts with a revised 1.3 per cent rise recorded in April.
The ONS pointed to falling sales in food stores — particularly supermarkets — as the main driver of the downturn, with reduced purchases of alcohol and tobacco playing a notable role. “The monthly fall was mainly due to a dismal month for food retailers, especially supermarkets,” said Hannah Finselbach, senior statistician at the ONS. “Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.”
Analysts had anticipated a more positive month, buoyed by warmer weather and two public holidays in May. However, those factors failed to spur spending. “Two bank holidays and further good weather were not enough to entice spending,” noted Oliver Vernon-Harcourt, head of retail at Deloitte. “For the first time this year, retail sales fell more than expected.”
Non-food sectors also experienced a slowdown. Clothing, homeware, and DIY stores saw reduced footfall after an April surge that had been driven by seasonal purchases and home improvement activity. Rising prices in key categories — including food, furniture, and household goods — have continued to affect consumer behaviour, with many shoppers becoming increasingly cautious in their spending.
Despite the monthly drop, the broader picture offers some reassurance. Retail sales volumes rose by 0.8 per cent in the three months to May compared to the previous quarter, hinting at underlying resilience in the sector.
“May’s lower retailing outturn does not appear to be a major cause for concern,” said Matt Swannell, chief economic adviser to the EY Item Club. “Retail sales data is volatile, and large month-on-month swings in the series should always be interpreted with caution.”
He added that the overall trend points to modest growth, which EY expects to persist barring major economic shocks.
Nonetheless, the sharper-than-expected decline comes at a delicate time for retailers, many of whom are relying on summer trading to offset months of mixed performance. With inflation gradually easing but wage growth slowing, the coming months will be crucial in determining whether May’s figures were an anomaly — or the beginning of a renewed tightening in consumer spending.
