Consumer spend slows to lowest growth of 2025
Sales of fashion and full-price big ticket items were held back by faltering consumer confidence, although gaming bucked the trend due to popular new releases, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
Total retail sales across the UK were up by 1% year-on-year in May, against growth of 0.7% a year ago, driven by food sales increasing by 3.6% on the back of football tournaments and two bank holidays, prompting spending on barbecues and picnics.
Non-food sales were down 1.1% year-on-year in May.
BRC chief executive Helen Dickinson said: 'Consumers put the brakes on spending, with the slowest growth in 2025 so far.
'Retailers are grappling with the £5 billion in extra costs from higher National Insurance contributions and wages, which kicked in during April. They also face an additional £2 billion later this year from new packaging taxes and remain concerned about the consequences of the Employment Rights Bill.
'Ensuring the new bill supports workers' rights without undermining retailers' ability to continue to provide jobs and investment in people will determine whether government achieves economic growth across the country or not.'
Linda Ellett, UK head of retail and leisure consumer markets at KPMG, said: 'While the sunshine continued, the pace of retail sales growth didn't in May.
'Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises.
But May still saw slight growth, driven mainly by food and drink, with non-food purchases falling overall.'
Separate figures from Barclays also show consumer card spending grew just 1% year-on-year in May, down from April's 4.5%. The bank said May's two Bank Holidays encouraged discretionary spending, although this was offset by wet weather in the second half of the month, and by consumers cutting back amid falling confidence in personal finances.
Spending in pharmacies and on health and beauty recorded the highest growth in May — up 12% — linked to the UK's sunniest spring on record and a surge in NHS website visits for hay fever advice.
Airline spending jumped by 9.7% as consumers made summer plans, while garden centres saw a 7.2% increase.
Karen Johnson, head of retail at Barclays, said: 'Consumers are clearly becoming more value-conscious as financial pressures persist, but they're still finding joy in the everyday — whether that's a small treat, a cinema trip, a garden project, or a carefully planned getaway.
'The double Bank Holidays in May and record sunshine will have given non-essential spending a helpful boost, but this was largely outweighed by the rainy weather in the second half of the month, while longer-term uncertainty continues to shape how and where people choose to spend.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Glasgow Times
an hour ago
- Glasgow Times
Child Benefit changes on cards after Winter Fuel U-turn
On Newsnight, the Money Saving Expert founder said: "I've been complaining about the Child Benefit Higher Income tax clawback for years, because what that does is that it says if the highest earner in the household earns over £80,000, you don't get Child Benefit. "So then you've got two neighbours who earn just under £60,000, so that's £120,000 for that family. They get Child Benefit. Their next door neighbour, one earns £80,000, one earns nothing, they don't get it. "I have been told for years that we can't split a household payment into a personal tax payment, which is exactly what the government has just done. "So when I got a WhatsApp today from Rachel Reeves telling me, 'sorry I couldn't explain to you in person', because I've been lobbying hard that we need to change on this (winter fuel payment changes), my first reply back is, 'this is wonderful news, and I am relieved, and this is a massive improvement, and I think it will take a lot of pressure off a lot of vulnerable people'. But I did also say, 'by the way, can we now do it for Child Benefit'?." How are Child Benefit high income charges paid? The high-income child benefit charge applies if you or your partner earn more than £60,000. Under current rules, you need to file a self-assessment tax return to pay the charge, but it was mentioned in the Spring Statement that this will soon be available to pay directly through PAYE. Once registered with HMRC, parents should be able to choose to have their HICBC collected through their monthly pay packet, meaning they'll no longer need to file a return for that purpose. "I got a Whatsapp today from Rachel Reeves..." Martin Lewis tells @vicderbyshire he has been texting the Chancellor on how her Winter Fuel U-turn could pave the way for a new approach to Child Benefit payments. #Newsnight — BBC Newsnight (@BBCNewsnight) June 9, 2025 How much is Child Benefit and what was the increase for 2025? From April 7 2025, parents receive £26.05 a week (£1,355 a year) for their eldest or only child and £17.25 a week (£897 a year) for each additional child. These figures are a 1.7% increase on the £1,331 a year for the eldest child and £881 a year for each additional child paid in 2024-25 For now, if your income is over the threshold, you can choose to either get Child Benefit payments and pay any tax charge at the end of each tax year, or opt out of getting payments and not pay the tax charge. If you choose to opt out of getting Child Benefit payments You should still fill in the Child Benefit claim form. You need to state on the form that you do not want to get payments. You need to fill in the claim form if you want to: get National Insurance credits, which count towards your State Pension get your child a National Insurance number without them having to apply for one - they'll usually get the number before they turn 16 years old Recommended reading: Is there a two-child cap on Child Benefit? No, and this is the cause of a great deal of confusion, as Martin Lewis has explained on his website Money Saving Expert. "Child Benefit is a universal payment made for every child you have," he says. "It should accurately be called the 'two-child limit for Universal Credit or Tax Credits'. "This one applies to the benefits that people who have low incomes, whether they're working or not working, get. That's what this is about. "And in simple terms, it means if you have more than two children, then you won't get any additional benefit for the costs that they are incurring you (on Universal Credit and Tax Credits)."
Scotsman
an hour ago
- Scotsman
Spending Review 2025: what time is Reeves' announcement?
Big pledges on housing, healthcare, and transport are expected, but questions remain over where cuts may fall 🚆 Sign up to the weekly Cost Of Living newsletter. Saving tips, deals and money hacks. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Rachel Reeves unveils her 2025 spending review today, promising to prioritise 'working people' and drive Britain's economic renewal Big spending boosts are expected to include £30bn for the NHS, £4.5bn for schools, and £39bn for social housing Transport and energy upgrades should also feature heavily, including billions for public transport, nuclear power, and a £3 bus fare cap extension No tax hikes (on income tax, National Insurance, or VAT) are expected, but other departments may face cuts to balance the books Watch live around 12:30pm on Parliament TV, BBC News, Sky News or BBC Parliament Rachel Reeves will today (June 11) unveil her much-anticipated 2025 spending review, pledging to align government priorities with those of 'working people' and spearhead what she is calling 'Britain's renewal.' The Chancellor is expected to focus heavily on boosting core public services and infrastructure while juggling tough monetary constraints – all without raising income tax, National Insurance or VAT. Advertisement Hide Ad Advertisement Hide Ad Reeves will outline day-to-day spending plans for the next three years and capital investment plans stretching into 2029. Here's what's expected to be announced, and how it might impact your money: (Photo: Peter Byrne -) | Getty Images Major spending increases Headline commitments expected to be or already announced include: £30 billion increase in NHS funding – a 2.8% real-terms rise, aimed at tackling record waiting lists and modernising healthcare. £4.5 billion extra for schools, enhancing classroom resources and teacher support. Defence spending rise to 2.5% of GDP, in line with NATO obligations and national security priorities. £39 billion over 10 years for affordable and social housing, nearly doubling annual housing investment to £4 billion by 2029/30. £15.6 billion for public transport in English city regions, supporting tram and bus upgrades outside the capital. £16.7 billion for nuclear energy, most of it going to build the new Sizewell C power plant in Suffolk. £445 million for Welsh rail upgrades, and an extension of the £3 bus fare cap until March 2027. One of the notable omissions in the spending review is the lack of major infrastructure funding for London, and no sign of a tourist levy – a key request from Mayor Sadiq Khan. Advertisement Hide Ad Advertisement Hide Ad While the Government promises reform of the Treasury's 'green book' rules – which decide how investment is distributed – the shift is designed to favour regions outside London and the South East. Will there be tax hikes? Despite the expanded spending commitments, Reeves has repeatedly stressed that Labour's 'fiscal rules' remain in place, and that there will be no increases to income tax, National Insurance, or VAT – raising the question of where future savings or revenues will come from. The Institute for Fiscal Studies (IFS) has warned that real-terms increases to the NHS above 2.5% may mean squeezes elsewhere – particularly for departments like local government, justice, and the Home Office. Although some departments, such as policing, may receive inflation-beating settlements, others are likely to face tightening belts. Advertisement Hide Ad Advertisement Hide Ad Additionally, the Government's recent U-turn on winter fuel payments – now extended to pensioners earning up to £35,000 – adds around £1.25 billion to public spending, reducing Reeves' fiscal headroom even further. What it means for you Better public services, particularly in health and education, may mean improvements in access and quality – though not immediately. More affordable housing could ease rental pressure and improve supply, especially for lower-income households. The extended bus fare cap and transport upgrades could mean cheaper and more reliable travel, particularly in city regions outside London. Advertisement Hide Ad Advertisement Hide Ad No major tax rises (yet) will be a relief for household budgets, though future tax tweaks or spending cuts in other areas remain a possibility. What time is the Spending Review? The Chancellor's speech is expected around 12:30 pm BST, shortly after Prime Minister's Questions, which start at noon in the House of Commons. Major broadcasters, including BBC News and Sky News, will carry live coverage.
The National
6 hours ago
- The National
Chancellor urged to tackle child poverty as 'priority' by Scots charities
On Wednesday, Rachel Reeves will set out the UK Government's first spending review since she announced £5 billion of cuts to disability benefits in the September 2024 Budget. Earlier this week the UK Government U-turned on its proposed cuts to winter fuel payments for pensioners, sparking calls for ministers to go further and end the two-child benefit cap. We previously told how research, commissioned by the SNP, found that almost two million families in the UK would be lifted out of poverty if Westminster followed Scotland's lead. This would mean abolishing the two-child benefit cap, scrapping the bedroom tax and raising the child element of Universal Credit to match the Scottish child payment. READ MORE: UK must do 'far more' than sanctions and stop all arms sales to Israel The Scottish Government has also previously called on the Chancellor to rethink the cuts and to fully fund the National Insurance employer increase for Scotland's public services. The spending review comes amid warnings the number of children in the UK living in poverty is expected to rise to a record 4.6 million by 2029-30. Satwat Rehman, chief executive of One Parent Families Scotland, told The National: 'We are deeply concerned that the government is pressing ahead with damaging welfare reforms - including proposed cuts to disability benefits and delays to the long-promised child poverty strategy. 'In the midst of a worsening cost-of-living crisis, these decisions risk pushing already struggling single-parent families into even deeper hardship. 'The growing uncertainty is compounding anxiety for single parents, who face immense financial strain and will be disproportionately impacted as sole carers and providers for their children. (Image: .) 'We urge the UK Government to take decisive action to reduce child poverty in tomorrow's Spending Review and to protect vulnerable families from further harm.' Over the past decade, the number of children living in poverty has risen from 3.7m (27%) in 2013/14 to 4.5m (31%) in 2023/24. John Dickie, director of Child Poverty Action Group in Scotland, also urged the UK Government to rethink its swingeing benefit cus. 'If the UK Government is serious about bringing forward a credible child poverty strategy the Chancellor must commit to allocating the resources needed to scrap the two-child limit,' he told The National. 'It's the single biggest driver of rising child poverty across the UK - pushing 109 more children into poverty every single day that passes. READ MORE: Independent Scotland would break ties with Israel, says Stephen Flynn 'And with families affected by disability at even higher risk of poverty, a major rethink is also needed on planned cuts to disability and sickness benefits. 'The spending review offers an opportunity to weigh up not just the moral costs of child poverty but the economic costs. Leaving so many of our children to grow up in poverty is a drag on the economy and a massive fiscal burden on the public services left to pick up the pieces. 'Investing to end child poverty must be the priority.' It comes as UK health, defence, and education departments are set to see a funding boost in the announcement, with £113bn going to capital funding for infrastructure projects. The Acorn carbon capture hub in Peterhead, Aberdeenshire, is reportedly set to receive funding. (Image: NQ) Local MP Seamus Logan, SNP, said he 'cautiously welcomed' the announcement but added there must be guarantees and sufficient funding put in place for the project. Meanwhile, climate campaigners criticised the funding being given to a 'greenwashing' project. Reeves is set to tell the Commons: 'The priorities in this spending review are the priorities of working people. 'To invest in our country's security, health and economy so working people all over our country are better off.' The Chancellor has also already announced some £15.6 billion of spending on public transport in England's city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk. Wes Streeting's health department is set to be one of the biggest winners for funding, ahead of the publication of the NHS 10-year plan, due to be released shortly after the spending review. The full implications for Scotland, and what funding will be made available for ministers, will not be clear until after the full statement.
