LONDON, – Britain’s retail sector experienced its sharpest monthly contraction since December 2023, as official data revealed a 2.7% decline in retail sales volumes for May – significantly worse than the 0.5% fall anticipated by economists in a Reuters poll.

According to the Office for National Statistics (ONS), the slump follows a surge in consumer spending in April, when unusually warm weather prompted higher demand for food, summer apparel, and home improvement goods.

On an annual basis, sales volumes were down 1.3% compared to May 2023 – the steepest year-on-year decline since April 2024, and a stark contrast to the expected 1.7% growth.

While April’s figures painted a rosier picture of consumer confidence, June’s retail data reveals a more cautious sentiment on the ground. Despite GfK’s latest consumer sentiment index hitting its highest point of the year, retail performance has shown signs of divergence.

The British Retail Consortium (BRC) had earlier cautioned about a slowdown, noting that many consumers had already completed their seasonal purchases in April, leading to weaker activity in May.

Performance among major retailers has also been mixed. Tesco, the UK’s largest grocery chain, posted stronger-than-expected Q1 sales results, defying a highly competitive market environment. In contrast, Poundland – a prominent discount retailer – announced plans to shutter 68 outlets as it grapples with continued operational challenges.

The data underscores the volatility in consumer behaviour and the broader pressures facing the UK retail landscape as households continue to navigate inflationary headwinds and shifting seasonal demand.