Spending falls to lowest level in yr as companies ‘grapple with extra costs’ | EUROtoday

Retail spending slowed to its lowest price this yr in May, new figures present, as client confidence dipped.

The British Retail Consortium (BRC)-KPMG Retail Sales Monitor discovered that gross sales of vogue objects and massive ticket objects have been notably affected, whereas gaming gross sales elevated because of new releases.

Total retail gross sales throughout the UK elevated by 1 per cent year-on-year in May, in comparison with 0.7 per cent a yr in the past. Food gross sales drove this progress, rising by 3.6 per cent as soccer tournaments and two financial institution holidays inspired spending on BBQs and picnics.

However, non-food gross sales decreased by 1.1 per cent year-on-year in May.

BRC chief govt Helen Dickinson mentioned: “Consumers put the brakes on spending, with the slowest growth in 2025 so far.

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“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 client markets at KPMG, mentioned: “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 additionally present client card spending grew simply 1 per cent year-on-year in May, down from April’s 4.5 per cent.

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The financial institution mentioned May’s two Bank Holidays inspired discretionary spending, though this was offset by moist climate within the second half of the month, and by shoppers reducing again amid falling confidence in private funds.

Spending in pharmacies and on well being and wonder recorded the very best progress in May – up 12 per cent – linked to the UK’s sunniest spring on report and a surge in NHS web site visits for hay fever recommendation.

Airline spending jumped by 9.7 per cent as shoppers made summer time plans, whereas backyard centres noticed a 7.2 per cent enhance.

Karen Johnson, head of retail at Barclays, mentioned: “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.”