Spending falls to lowest level in yr as companies ‘grapple with additional prices’

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Your help makes all of the distinction. Learn extra Retail spending slowed to its lowest price this yr in Could, new figures present, as shopper confidence dipped.

The British Retail Consortium (BRC)-KPMG Retail Gross sales Monitor discovered that gross sales of vogue gadgets and massive ticket gadgets had been significantly affected, whereas gaming gross sales elevated as a consequence of new releases.

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

Nonetheless, non-food gross sales decreased by 1.1 per cent year-on-year in Could.

BRC chief government Helen Dickinson mentioned: “Customers put the brakes on spending, with the slowest progress in 2025 to date.

<img src="https://static.independent.co.uk/2025/06/09/13/58/Consumers-slowed-their-spending-to-the-lowest-growth-of-the-year-in-May-amid-falling-confidence-figu.jpeg" srcset="https://static.independent.co.uk/2025/06/09/13/58/Consumers-slowed-their-spending-to-the-lowest-growth-of-the-year-in-May-amid-falling-confidence-figu.jpeg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2025/06/09/13/58/Consumers-slowed-their-spending-to-the-lowest-growth-of-the-year-in-May-amid-falling-confidence-figu.jpeg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Consumers slowed their spending to the lowest growth of the year in May amid falling confidence, figures show" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Customers slowed their spending to the bottom progress of the yr in Could amid falling confidence, figures present (PA) “Retailers are grappling with the £5 billion in additional prices from increased Nationwide Insurance coverage contributions and wages, which kicked in throughout April. Additionally they face an extra £2 billion later this yr from new packaging taxes and stay involved concerning the penalties of the Employment Rights Invoice.

“Making certain the brand new Invoice helps staff’ rights with out undermining retailers’ capability to proceed to supply jobs and funding in individuals will decide whether or not Authorities achieves financial progress throughout the nation or not.”

Linda Ellett, UK head of retail and leisure shopper markets at KPMG, mentioned: “Whereas the sunshine continued, the tempo of retail gross sales progress didn’t in Could.

“Early seasonal purchases had been seemingly an element, as was a dampening of some spending urge for food as households mirrored upon the current mixture of important invoice rises.

However Should still noticed slight progress, pushed primarily by food and drinks, with non-food purchases falling general.”

Separate figures from Barclays additionally present shopper card spending grew simply 1 per cent year-on-year in Could, down from April’s 4.5 per cent.

<img src="https://static.independent.co.uk/2025/06/09/13/30/shopping-consumers-stock.jpeg" srcset="https://static.independent.co.uk/2025/06/09/13/30/shopping-consumers-stock.jpeg?quality=75&width=320&crop=3%3A2%2Csmart&trim=0%2C0%2C0%2C0&auto=webp 320w, https://static.independent.co.uk/2025/06/09/13/30/shopping-consumers-stock.jpeg?quality=75&width=640&crop=3%3A2%2Csmart&trim=0%2C0%2C0%2C0&auto=webp 640w" loading="lazy" alt="Retail spending slowed to its lowest rate this year in May" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Retail spending slowed to its lowest price this yr in Could (Getty/iStock) The financial institution mentioned Could’s two Financial institution Holidays inspired discretionary spending, though this was offset by moist climate within the second half of the month, and by customers chopping again amid falling confidence in private funds.

Spending in pharmacies and on well being and wonder recorded the very best progress in Could – 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 customers made summer season plans, whereas backyard centres noticed a 7.2 per cent enhance.

Karen Johnson, head of retail at Barclays, mentioned: “Customers are clearly turning into extra value-conscious as monetary pressures persist, however they’re nonetheless discovering pleasure within the on a regular basis – whether or not that’s a small deal with, a cinema journey, a backyard undertaking, or a fastidiously deliberate getaway.

“The double Financial institution Holidays in Could and report sunshine could have given non-essential spending a useful increase, however this was largely outweighed by the wet climate within the second half of the month, whereas longer-term uncertainty continues to form how and the place individuals select to spend.”