From Yahoo Finance: 2025-05-27 10:38:00

UK retailer sentiment plummeted to a five-year low in May 2025, with businesses bracing for worsening conditions. Retail sales volumes declined, online sales improved after six months, and plans are underway to cut back on investment and workforce due to weak demand.

Retail sales dropped by 27% year-on-year, with a projected 37% decline in June. Retailers rated May’s performance as “poor” but anticipate a slight improvement in June. Online sales increased by 37% over the past year, and retailers predict a further rise in June at a more modest pace (+17%).

Retail selling price inflation continued to rise but stayed below the long-term average. Retailers foresee an increased rate of price inflation at 57% next month. Orders placed with suppliers fell sharply by 41% in May, and retailers expect this reduced level to continue into June (-42%).

CBI lead economist Ben Jones highlighted the challenges facing the retail sector, citing fragile consumer demand, online sales holding up better, and impacts of higher NICs and National Living Wage increase. Retailers are cutting back on hiring, scaling back investment, and plan to increase selling prices at the fastest pace in over a year.

The British Retail Consortium (BRC) – NielsenIQ shop price index revealed steady overall shop price deflation in the UK at 0.1% year-on-year in May 2025, matching April’s rate. This rate exceeds the three-month average deflation rate of -0.2%.

Read more: UK retailers expect tough quarter as sentiment drops to five-year low