UK retail sales fall sharply in May

British retail sales slumped in May, marking the sharpest monthly decline in a year and a half, as consumer demand fell following a strong spending surge in April on food, summer clothing, and home improvements.

Retail sales fell by 2.7% in May, a sharp reversal from the upwardly revised 1.3% gain in April and far worse than economists’ expectations of a 0.5% drop. On an annualized basis, retail sales declined by 1.3%, down significantly from April’s 5% jump and well below forecasts for a 1.7% increase.

Economists cited a particularly weak month for food retailers, with reduced spending on alcohol and tobacco, lower foot traffic in clothing stores, and decreased demand for DIY items—largely because dry weather in previous months had enabled earlier completion of home improvement projects.

The steep drop in retail sales adds to growing signs that the burst of economic growth seen in the first quarter of 2025 may be fading. The UK economy expanded by a stronger-than-expected 0.7% in Q1 but contracted in April, impacted by the expiration of a property tax break and early effects from US tariffs.

Despite this, the Bank of England still forecasts full-year economic growth of 1% for 2025.