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UK Consumer Spending Growth Slows to 1% in May on Rising Financial Pressures

Nearly half of consumers plan to cut discretionary spending after household confidence hit its lowest level this year

Shoppers walk along Regent Street in London, Britain, July 9, 2024. REUTERS/Hollie Adams/File Photo
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Overview

  • Retail sales growth slowed to 1% in May year-on-year, down from a 7% jump in April, marking the weakest pace of 2025 according to the BRC-KPMG Retail Sales Monitor.
  • Food sales rose 3.6% driven by football tournaments and two bank holidays, while non-food sales declined by 1.1%.
  • Spending on health and beauty products climbed 12%, airline tickets increased by 9.7%, and garden centre purchases gained 7.2%.
  • Retailers are absorbing an extra £5 billion from higher National Insurance contributions and wage costs plus £2 billion in forthcoming packaging taxes, and they remain wary of the Employment Rights Bill.
  • Consumer card spending growth slipped to 1% in May from April’s 4.5% as household confidence fell three percentage points to 67%, prompting nearly half of consumers to plan cuts in discretionary purchases.