GlobalData
3 min read
UK retail sector growth faced a slowdown in May 2025 as consumer spending decelerated, according to data from the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
The sector experienced a modest increase of 1% year-on-year (YoY) in total retail sales, with food sales showing a stronger performance compared to non-food categories.
Between 4 May and 31 May, food saw a 3.6% increase in sales YoY, compared to a 2.8% increase in May 2024. The growth was bolstered by the end of football tournaments and two Bank Holidays, which encouraged expenditure on barbecues and picnics.
Non-food sales saw a 1.1% YoY dip in May, consistent with the decline experienced in May 2024. In-store non-food sales fell 0.9% against a steeper decline of 2.6% in the previous year.
Online non-food sales also dropped 1.5% in a stark contrast to the growth of 1.5% seen in May 2024.
The online penetration rate for non-food items remained unchanged at 35.9% - the same as in May 2024. This indicates a stabilisation in the proportion of non-food purchases made online.
BRC chief executive Helen Dickinson stated: “Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence. Gaming bucked the trend, thanks to some popular new releases.”
Dickinson also noted the current financial pressures faced by the retailers, with an additional £5bn ($6.7bn) in costs due to higher National Insurance contributions and wages that came into effect in April. They anticipate a further £2bn in costs from new packaging taxes later in the year.
Concerns are also mounting over the implications of the Employment Rights Bill.
Dickinson added: "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."
As summer 2025 approaches, there is a positive outlook for travel demand, which retailers hope will translate into increased consumer spending. With holiday planning underway, June may bring a boost in sales as customers shop for their travel necessities.
Institue of Grocery Distribution CEO Sarah Bradbury stated: “After the sunniest spring on record and a string of Bank Holidays, our Shopper Confidence Index rose by five points in May, helped by the prospect of lower energy bills and renewed momentum in UK trade agreements with the US and EU. This uplift marks a welcome shift from ‘awful April’, but beneath the surface, confidence remains fragile.
