Retail sales fell sharply in May in the month after consumers were hit by a raft of “Awful April” higher bills that bit deeply into household budgets.
Latest figures from the Office for National Statistics show the volume of sales fell 2.7% in May, the biggest monthly decline since December 2023.
The ONS said it was a particularly “dismal” month for supermarkets as consumers cut back.
It was the first monthly fall in the year and follows a rise of 1.3% in April.
The downbeat figures will come as a blow to the high street after a relatively robust start to the year and raise fears that that the April bill increases - on essentials ranging from energy to mobile phones - will hit the sector hard over the coming months.
Supermarkets saw a particularly big fall with volumes down by 5% following growth of 4.7% in April boosted by fine Spring weather. This was the largest monthly fall since May 2021.
Retailers contacted by the ONS spoke of “of inflation and customer cutbacks, alongside reduced sales of alcohol and tobacco products.”
Food inflation rose to 4.4% in the year to May.
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.”
Non-food stores saw a smaller fall of 1.4% over the month with fashion and household goods stores such as hardware, paints and glass retailers taking the biggest hit.
According to the ONS retailers “mentioned reduced footfall and consumers having completed home projects earlier than usual this year because of good weather, leading to lower sales in May.”
Online sales were down by 1%.
On an annual basis overall retail sales volumes fell by 1.3% over the year to May 2025. They are still 2.7% below pre-pandemic levels in February 2020.
Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club said: "Cracks in consumer spending may finally be starting to appear - retail sales volumes came in much worse than expected in May.
“The sales decline was broad based with every category seeing weakness and online spending also falling.
“Food sales were especially weak, giving up all their gains in April, and a bit more. Clothing also had another weak month suggesting that consumers may be cutting back on discretionary purchases.
“It's only one month, but these figures do not paint a great picture. Cracks in the UK economy are starting to appear and consumers are starting to feel less confident. This will intensify pressure on the Bank of England to cut rates sooner rather than later."
Sagar Shah, Associate Partner at consultants McKinsey & Company said: "Even the second sunniest May on record couldn’t stop retail sales slipping into the shade, down 2.7%. This is the first month this year that retail figures have fallen.
“The caution could in part be attributed to food inflation being at the highest level since February 2024. And, other fiscal pressures that retailers are facing that could potentially be impacting promotions. “
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “For the first time this year, retail sales fell more than expected, as two bank holidays and further good weather were not enough to entice spending.
“A late Easter combined with the sunniest April on record brought some seasonal sales forward, meanwhile continued inflationary pressures from food, furniture and household goods hampered sales volumes.
“Overall, consumers remain cautious in the face of persistent inflation, increased utility costs and ongoing geopolitical uncertainty. While this transpired into fewer purchases in May, there is a broader picture of improving household finances.
“Consumers have been saving at one of the highest levels on record, and with robust real wage growth, this could generate some helpful tailwinds for the retail sector throughout the rest of 2025.
“With warm weather set to continue, retailers will hope to see a boost from the sale of summer food, clothing and outdoor offerings, resulting in a return to growth in the months ahead.”
This article was written by Jonathan Prynn from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.