The Confederation of British Industry’s (CBI) retail sales gauge for the UK fell sharply to -27 in May 2025 from -8 in April, significantly underperforming market expectations of -18.
UK CBI retail sales fall sharply
This steep decline signals a worsening environment for retailers, as sales conditions deteriorated more than anticipated. Although retail sales were still judged to be “poor” in May, the extent of the weakness was somewhat less severe compared to the previous month, with 19% of respondents reporting poor sales versus -31% in April. However, sentiment about the near future painted an even more pessimistic picture: a forward-looking measure of expected sales for June dropped to -37%, marking the lowest level since February 2024 and highlighting concerns about ongoing softness in consumer spending.
Further compounding the bleak outlook, the quarterly gauge of overall business sentiment in the retail and distribution sector plunged to -29% in May, the lowest reading in five years, down from -19% in February. This decline underscores mounting challenges not only in sales but also in confidence among business leaders. Retailers are bracing for a significant scale-back in investment over the coming year, with plans dropping to -47%, down from -56% earlier this year. This retreat in planned spending reflects caution amid uncertain economic conditions, rising costs, and subdued demand.
Economist comment
Ben Jones, Lead Economist at the CBI, commented on the findings: “This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector. In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand, though online sales seem to be holding up better.” The divergence between traditional bricks-and-mortar stores and e-commerce channels points to a shifting landscape, where retailers must adapt to changing consumer behaviors amid economic headwinds.
