UK retail sales show biggest fall in 18 months as shoppers cut back on food and clothing

Retail sales across the UK fell sharply in May, recording their steepest monthly drop in 18 months, as consumers scaled back spending on essentials such as food and clothing, official figures show.

According to data released by the Office for National Statistics (ONS), retail sales volumes declined by 2.7 per cent last month — significantly more than economists had forecast. It marks the largest monthly fall since December 2023, and comes in contrast to a 1.3 per cent rise in April, which was revised upwards from a previous estimate of 1.2 per cent.

The ONS attributed much of the slump to weaker performance by food retailers, particularly supermarkets, which saw a notable drop in alcohol and tobacco sales. “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 expected warmer weather and two May bank holidays to boost consumer activity, but that failed to materialise. “For the first time this year retail sales fell more than expected,” said Oliver Vernon-Harcourt, head of retail at Deloitte. “Two bank holidays and further good weather were not enough to entice spending.”

Clothing, homeware and DIY retailers also reported declining footfall, reversing the April surge when sunny weather had encouraged shoppers to invest in home improvements. Demand for DIY products dropped back, while fashion retailers saw fewer customers on the high street.

Rising prices in categories such as food, furniture and household goods continued to weigh on consumer behaviour, Vernon-Harcourt added, noting that persistent inflationary pressures were making shoppers more cautious.

Despite May’s setback, retail sales volumes rose 0.8 per cent in the three months to May, compared to the previous three-month period, suggesting a degree of underlying resilience in consumer spending.

Matt Swannell, chief economic adviser to the EY Item Club, urged caution in reading too much into the monthly figure. “May’s lower retailing outturn does not appear to be a major cause for concern,” he said. “Retail sales data is volatile and large month-on-month swings in the series should always be interpreted with caution.”

He added that the underlying trend remains one of modest growth, and said EY expects that to continue, barring a significant change in economic conditions.

The sharp drop in May comes at a sensitive time for retailers, many of whom have been hoping for a summer boost following months of mixed consumer sentiment. With inflation easing but wage growth slowing, the outlook for the second half of the year remains uncertain. Retailers will be watching June’s figures closely to assess whether May’s decline proves to be a one-off — or a sign of renewed caution among shoppers.