UK retail sales surge in May with biggest annual rise since April 2025

The sharp rebound in both BRC and Barclays data will offer some near-term relief for UK consumer sentiment readings, but the underlying picture remains cautious. Spending growth of 0.8% annually remains well below the 3% inflation rate, meaning real consumer purchasing power is still being eroded. The third consecutive monthly decline in travel and the 12.9% drop in airline spending are the starkest signals that geopolitical anxiety around the Iran conflict is actively shaping household behaviour beyond the retail sector. For Bank of England watchers, the mix of recovering retail volumes but persistent real-terms weakness and travel caution keeps the policy outlook finely balanced.

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UK retail sales jumped 3.7% year-on-year in May, the biggest rise since April 2025, driven by heatwave demand, though travel spending fell for a third straight month on Iran war caution.

Summary:

• BRC total retail sales rose 3.7% year-on-year in May, reversing a 3.0% decline in April and marking the strongest annual increase since April 2025
• BRC like-for-like sales gained 3.4% year-on-year versus a 3.4% fall in April, also the best reading since April 2025
• Barclays consumer spending rose 0.8% annually in May, up from a 0.1% decline in April, though still running well below the roughly 3% inflation rate
• Heatwave conditions and the early May bank holiday boosted food and drink, clothing, footwear, health and beauty, and outdoor goods across both surveys
• Travel spending fell 5.8% for a third consecutive month, with airline expenditure down 12.9% year-on-year; two in three Barclays respondents said they were making financial adjustments in response to economic uncertainty
• BRC chief executive Helen Dickinson credited the May heatwave with driving a surge in outdoor and summer goods, with food sales lifted by bank holiday barbecue demand

British consumers increased their spending sharply in May, snapping a run of weakness in April, though persistent caution over the economic fallout from the Iran conflict continued to suppress travel expenditure for a third consecutive month.

The British Retail Consortium reported total retail sales growth of 3.7% year-on-year in May, the strongest annual increase since April 2025 and a decisive reversal from a 3.0% decline the previous month. Like-for-like sales rose 3.4%, compared with a 3.4% fall in April, also the best reading in over a year. Food sales advanced 3.9% and non-food 3.5%.

BRC chief executive Helen Dickinson attributed much of the improvement to May’s heatwave, which triggered strong demand for summer clothing, footwear, outdoor equipment, fans and lighter bedding, while bank holiday barbecues provided an additional lift to food sales.

Barclays reported consumer spending up 0.8% in annual terms for the period covering late April to late May, a recovery from a 0.1% contraction in April. However, that figure remains well below inflation running at around 3%, pointing to continued real-terms pressure on household budgets.

The most persistent weak spot is travel. Barclays recorded a 5.8% annual fall in travel spending, with airline expenditure down 12.9%, as consumers pulled back on overseas plans. Two thirds of respondents said they were actively adjusting their finances in response to broader economic uncertainty.

This article was written by Eamonn Sheridan at investinglive.com.