Retail spending slowed to its lowest rate this year in May, new figures show, as consumer confidence dipped.
The British Retail Consortium (BRC)-KPMG Retail Sales Monitor found that sales of fashion items and big ticket items were particularly affected, while gaming sales increased due to new releases.
Total retail sales across the UK increased by 1 per cent year-on-year in May, compared to 0.7 per cent a year ago. Food sales drove this growth, increasing by 3.6 per cent as football tournaments and two bank holidays encouraged spending on BBQs and picnics.
However, non-food sales decreased by 1.1 per cent year-on-year in May.
BRC chief executive Helen Dickinson said: “Consumers put the brakes on spending, with the slowest growth in 2025 so far.
“Retailers are grappling with the £5 billion in extra costs from higher National Insurance contributions and wages, which kicked in during April. They also face an additional £2 billion 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.”
Linda Ellett, UK head of retail and leisure consumer markets at KPMG, 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.”
Separate figures from Barclays also show consumer card spending grew just 1 per cent year-on-year in May, down from April’s 4.5 per cent.
The bank said May’s two Bank Holidays encouraged discretionary spending, although this was offset by wet weather in the second half of the month, and by consumers cutting back amid falling confidence in personal finances.
Spending in pharmacies and on health and beauty recorded the highest growth in May – up 12 per cent – linked to the UK’s sunniest spring on record and a surge in NHS website visits for hay fever advice.
Airline spending jumped by 9.7 per cent as consumers made summer plans, while garden centres saw a 7.2 per cent increase.
Karen Johnson, head of retail at Barclays, said: “Consumers are clearly becoming more value-conscious as financial pressures persist, but they’re still finding joy in the everyday – whether that’s a small treat, a cinema trip, a garden project, or a carefully planned getaway.
“The double Bank Holidays in May and record sunshine will have given non-essential spending a helpful boost, but this was largely outweighed by the rainy weather in the second half of the month, while longer-term uncertainty continues to shape how and where people choose to spend.”