Retail Sales Update: May’s Sharp Decline and What It Means for Home, Furniture, and Gift Retailers

New figures from the Office for National Statistics (ONS), released on Friday, 20 June, confirm that UK retail sales volumes fell by 2.7% in May 2025, the sharpest monthly decline since December 2023. The scale of the drop has prompted concern across the sector, particularly given the more optimistic signs seen earlier in the quarter.

Contextualising the Data

While May’s downturn is notable, it follows a stronger April, when retail sales volumes rose by 1.3% compared with March, a figure that has since been revised upward by the ONS. Over the three months to May, retail sales volumes were still up by 0.8% compared with the previous three-month period, indicating that some underlying growth continues, albeit inconsistently. The volatility of these monthly shifts highlights the fragility of consumer confidence in the current economic environment.

The BBC described supermarket performance as ‘dismal,’ with the ONS highlighting notable drops in alcohol and tobacco sales as shoppers continued to cut back. Reuters also reported that clothing and DIY sales fell, attributing this to earlier home and garden projects having already been completed during the spring’s better weather.

May’s figures reflect a broader slowdown in discretionary spending across food, household goods, and apparel. Footfall was down across most retail segments, despite two bank holidays and relatively favourable weather conditions.

Oliver Vernon-Harcourt, head of retail at Deloitte, observed, “The weather was once again unkind to the retail sector, as cooler conditions than average deterred consumers from spending on the high street.”

Implications for Home, Furniture, and Gift Retailers

For those trading in home, furniture, and giftware, these figures underscore the importance of staying agile in response to shifting consumer priorities.

• Heightened Consumer Selectivity
  With inflation still affecting household budgets, consumers are becoming increasingly cautious, seeking products that offer quality, longevity, and value for their money. Retailers that communicate these attributes stand to maintain engagement.

• Experience-Led Retail
  As foot traffic slows, brick-and-mortar businesses must do more to encourage visits and conversions. Personalised service, creative visual merchandising, and strong online storytelling are becoming critical levers.

• Realigning Strategy with Sentiment
  Promotional activity and inventory planning must remain tightly aligned with real-time customer behaviours. A flexible, data-driven approach to pricing and product curation can help mitigate periods of softer trading.

There are still opportunities. As Vernon-Harcourt also noted: “While many consumers remain cautious and are opting out of purchasing big ticket or luxury items, some are still treating themselves by spending on little luxuries.” For gift and lifestyle retailers in particular, this presents a chance to position smaller, design-led items as accessible indulgences—perfect for self-gifting or marking small moments.

Outlook: Resilience Amid Uncertainty

While the sharp monthly drop may feel like a setback, analysts continue to urge caution in interpreting one month’s figures in isolation. The 0.8% rise in sales over the past quarter suggests some resilience in underlying demand.

Consumer confidence data also shows tentative signs of improvement, particularly among younger demographics. According to the British Retail Consortium, Gen Z saw the most notable uplift in both economic outlook and expectations for personal finances. If sustained, this could support more discretionary spending through the latter half of 2025.

Conclusion

The May sales slump serves as a reminder of the challenges facing UK retail and its ability to adapt. For home, furniture, and gift retailers, the focus now shifts to delivering value through quality, customer experience, and meaningful connections, both with shoppers and the wider trade community.

Periods of contraction often spark fresh thinking and sharper strategy. In this climate, trade shows are more important than ever. Events like the Manchester Furniture Show and the Home & Gift Buyers Festival provide vital opportunities to reset, reconnect, and replenish. These calendar moments are strategic checkpoints, offering space to discover new collections, sense market direction, and make decisions with greater confidence.

With consumer sentiment in flux, having the right products at the right time is essential. Trade shows offer a platform to test ideas, build partnerships, and gather real-world insights — all under one roof.

Retail is rarely linear. However, by staying informed, listening to customers, and responding with agility, businesses can do more than survive; they can lay the groundwork for growth.

We’ll continue to track the data, share expert commentary, and spotlight innovation across the sector. Stay connected for more insight.

 

 

References

• Office for National Statistics (ONS). Retail sales, Great Britain: May 2025. Published 20 June 2025.

• BBC News. ‘Dismal’ month for supermarkets pushes down retail sales. 20 June 2025.

• Reuters. UK retail sales record biggest monthly drop since 2023. 20 June 2025.

• Deloitte. Press releases and retail sector commentary by Oliver Vernon-Harcourt.

• British Retail Consortium (BRC). Consumer Confidence Index and sector reports.