Data published by the Office for National Statistics (ONS) showed UK retail sales volumes fell by 2.7% in May 2025, marking the largest monthly decline since December 2023. The drop was significantly worse than the 0.5% fall forecasted and followed a 1.3% rise in April, when sunny weather and early summer shopping boosted sales.
The downturn was driven largely by a 5% slump in food store sales—the sharpest drop since May 2021—caused by reduced supermarket spending and lower demand for alcohol and tobacco. Non-food sales also declined by 1.4%, particularly in clothing and household goods, as many consumers had already made summer purchases in April.
Retailers cited inflation, cost-of-living pressures, and reduced footfall as key factors. While some retailers like Tesco reported stronger-than-expected results, others such as Poundland announced store closures.
On an annual basis, sales volumes were down 1.3%, missing expectations for a 1.7% rise and marking the largest year-on-year drop since April 2024. Excluding fuel, retail sales fell by 2.8% in May.
In a related note, the ONS also reported that UK government borrowing rose to £17.7 billion in May, the second-highest for the month since 1993, driven by increased spending despite higher tax revenues.