logo
UK retail sales slump in May after ‘dismal' month for supermarkets

UK retail sales slump in May after ‘dismal' month for supermarkets

Food shops faced the biggest drop in monthly spending in four years.
The Office for National Statistics said the total volume of retail sales fell by 2.7% in May.
This compared with a 1.3% rise in April, which was revised up from a previous estimate of 1.2% for the month.
May's overall retail sales came in considerably below the 0.7% decline that most economists had been expecting for the month.
It was also the biggest monthly fall since December 2023.
The ONS said it was a 'dismal' month for supermarkets with food sales falling sharply after a jump in April.
ONS senior statistician Hannah Finselbach said: 'Retail sales fell sharply in May with their largest monthly fall since the end of 2023.
'This was mainly due to a dismal month for food retailers, especially supermarkets, following strong sales in April.
Retail sales fell across all sectors in May 2025. This was the largest monthly fall since December 2023.
Retail sales volumes have fallen 2.7% in May 2025, following a rise of 1.3% in April 2025 (revised up from 1.2%).
Read more ➡️ https://t.co/0spSOuwdhv pic.twitter.com/us5TVl1cfl
— Office for National Statistics (ONS) (@ONS) June 20, 2025
'Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.'
The volume of sales in food stores dropped by 5% in May – the largest monthly fall since May 2021.
This was mainly because of people buying less in supermarkets, with retailers citing inflation and customers making cutbacks, the ONS said.
It comes amid rising food inflation across the UK, with the price of items such as chocolate, coffee, cheese and meat spiking last month.
The monthly decline for household goods was 2.5%, and for clothing and footwear shops it was 1.8%.
Ms Finselbach added that clothing and homeware stores were reporting reduced footfall in May.
A drop in demand for DIY items last month came after sunny weather in April boosted home improvement projects.
Some electricals sold well in May, which experts linked to strong pre-sales before the launch of the Nintendo Switch 2.
Despite May's decline, retail sales volumes rose by 0.8% across the three months to May, compared with the three months to February.
Nicholas Found, head of commercial content at research consultancy Retail Economics, said: 'May's retail performance underlines a shift in consumer behaviour, with households putting value at the centre of spending decisions and pulling back on non-essential purchases.
'The cost of living remains the dominant concern for households.
'Households are deferring spending on full-price fashion, big ticket home items and other discretionary goods, instead prioritising travel and experiences into the summer.'

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Tax hike fears mount after government borrowing jumps in May
Tax hike fears mount after government borrowing jumps in May

Western Telegraph

time21 minutes ago

  • Western Telegraph

Tax hike fears mount after government borrowing jumps in May

The Office for National Statistics (ONS) said borrowing surged to £17.7 billion last month, the second highest figure on record for May, surpassed only at the height of Covid. May borrowing was £700 million higher than a year earlier, though it was slightly less than the £18 billion most economists had been expecting. The higher borrowing came in spite of a surge in the tax take from national insurance after Chancellor Rachel Reeves increased employer contributions in April. The decision, which was announced in last autumn's budget, has seen wage costs soar for firms across the UK as they also faced a minimum wage rise in the same month. Experts warned the higher borrowing figures raised the chances of tax hikes to come in the budget later this year, with Ms Reeves under pressure to balance the books amid rising borrowing and her spending commitments. Thomas Pugh, economist at audit and consulting firm RSM UK, said he is pencilling in tax increases of between £10 billion and £20 billion. He said: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9 billion of fiscal headroom that she clawed back in March. 'Throw in the tough outlook for many Government departments announced in the spending review and U-turns on welfare spending and the Chancellor will probably have to announce some top-up tax increases after the summer.' Danni Hewson, AJ Bell head of financial analysis, said the borrowing figures 'will only add to speculation that the Chancellor will have to announce more spending cuts or further tax increases at the next budget if she wants to meet her fiscal rules and pay for her spending plans'. 'One big shock could wipe out any headroom Rachel Reeves might have, and there are still question marks about how much of GDP (gross domestic product) should be spent on defence and where the money is going to come from,' she added. Borrowing for the first two months of the financial year to date was £37.7 billion, £1.6 billion more than the same two-month period in 2024, according to the ONS. The data showed so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.9 billion or 14.7% to a record £30.2 billion in April and May combined. Rob Doody, deputy director for public sector finances, said: 'While receipts were up, thanks partly to higher income tax revenue and national insurance contributions, spending was up more, affected by increased running costs and inflation-linked uplifts to many benefits.' While May's borrowing out-turn was lower than economists were expecting, it was more than the £17.1 billion pencilled in by the UK's independent fiscal watchdog, the Office for Budget Responsibility (OBR), in March. The figures showed that central government tax receipts in May increased by £3.5 billion to £61.7 billion, while higher NICs saw social contributions rise by £1.8 billion to £15.1 billion last month alone. Since taking office, we have taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain Darren Jones, Chief Secretary to the Treasury Public sector net debt, excluding public sector banks, stood at £2.87 trillion at the end of May and was estimated at 96.4% of GDP, which was 0.5 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. The ONS said the sale of the final tranche of taxpayer shares in NatWest, formerly Royal Bank of Scotland, cut net debt by £800 million last month, but did not have an impact on borrowing in the month. Interest payments on debt, which are linked to inflation, fell £700 million to £7.6 million due to previous falls in the Retail Prices Index (RPI). But recent rises in RPI are expected to see debt interest payments race higher in June. Chief Secretary to the Treasury Darren Jones insisted the Government had 'stabilised the economy and the public finances'. 'Since taking office, we have taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain,' he said.

Tax hike fears mount after government borrowing jumps in May
Tax hike fears mount after government borrowing jumps in May

Glasgow Times

time32 minutes ago

  • Glasgow Times

Tax hike fears mount after government borrowing jumps in May

The Office for National Statistics (ONS) said borrowing surged to £17.7 billion last month, the second highest figure on record for May, surpassed only at the height of Covid. May borrowing was £700 million higher than a year earlier, though it was slightly less than the £18 billion most economists had been expecting. The higher borrowing came in spite of a surge in the tax take from national insurance after Chancellor Rachel Reeves increased employer contributions in April. The decision, which was announced in last autumn's budget, has seen wage costs soar for firms across the UK as they also faced a minimum wage rise in the same month. Experts warned the higher borrowing figures raised the chances of tax hikes to come in the budget later this year, with Ms Reeves under pressure to balance the books amid rising borrowing and her spending commitments. Thomas Pugh, economist at audit and consulting firm RSM UK, said he is pencilling in tax increases of between £10 billion and £20 billion. He said: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9 billion of fiscal headroom that she clawed back in March. 'Throw in the tough outlook for many Government departments announced in the spending review and U-turns on welfare spending and the Chancellor will probably have to announce some top-up tax increases after the summer.' Danni Hewson, AJ Bell head of financial analysis, said the borrowing figures 'will only add to speculation that the Chancellor will have to announce more spending cuts or further tax increases at the next budget if she wants to meet her fiscal rules and pay for her spending plans'. 'One big shock could wipe out any headroom Rachel Reeves might have, and there are still question marks about how much of GDP (gross domestic product) should be spent on defence and where the money is going to come from,' she added. Borrowing for the first two months of the financial year to date was £37.7 billion, £1.6 billion more than the same two-month period in 2024, according to the ONS. The data showed so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.9 billion or 14.7% to a record £30.2 billion in April and May combined. Rob Doody, deputy director for public sector finances, said: 'While receipts were up, thanks partly to higher income tax revenue and national insurance contributions, spending was up more, affected by increased running costs and inflation-linked uplifts to many benefits.' While May's borrowing out-turn was lower than economists were expecting, it was more than the £17.1 billion pencilled in by the UK's independent fiscal watchdog, the Office for Budget Responsibility (OBR), in March. The figures showed that central government tax receipts in May increased by £3.5 billion to £61.7 billion, while higher NICs saw social contributions rise by £1.8 billion to £15.1 billion last month alone. Public sector net debt, excluding public sector banks, stood at £2.87 trillion at the end of May and was estimated at 96.4% of GDP, which was 0.5 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. The ONS said the sale of the final tranche of taxpayer shares in NatWest, formerly Royal Bank of Scotland, cut net debt by £800 million last month, but did not have an impact on borrowing in the month. Interest payments on debt, which are linked to inflation, fell £700 million to £7.6 million due to previous falls in the Retail Prices Index (RPI). But recent rises in RPI are expected to see debt interest payments race higher in June. Chief Secretary to the Treasury Darren Jones insisted the Government had 'stabilised the economy and the public finances'. 'Since taking office, we have taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain,' he said.

UK economy contracts - with record fall in exports to the US after Trump tariff hikes
UK economy contracts - with record fall in exports to the US after Trump tariff hikes

Sky News

time2 hours ago

  • Sky News

UK economy contracts - with record fall in exports to the US after Trump tariff hikes

The UK economy shrank more than expected in April as the worst of President Trump's tariffs hit. The standard measure of economic output (GDP) contracted a sharp 0.3% in April, data from the Office for National Statistics (ONS) showed. During the month, Mr Trump's so-called "Liberation Day" applied steep tariffs to countries around the world and sparked a trade war with China, the world's second-largest economy. The outcome is worse than expected by economists. A contraction of just 0.1% had been forecast by economists polled by the Reuters news agency. It's also down from the growth of 0.2% recorded in March. Blow for Reeves It's also bad news for Chancellor Rachel Reeves, who has made the push for economic growth her number one priority. Speaking to Sky News following the news, she described the figures as "disappointing". 12:55 Additional costs on businesses were also levied during the month, as higher minimum wages and employer national insurance contributions took effect, which businesses told the ONS played a part in their performance. Why? The biggest part of the economy, the services sector, contracted by 0.4%, and manufacturing dropped 0.9%. There was the largest ever monthly fall in goods exported to the United States, the ONS said. Decreases were seen across most types of goods due to tariffs, it added. Higher stamp duty depressed house buying and meant legal and real estate firms fared badly in the month. After a strong showing in the first three months, car manufacturing performed poorly.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store