UK retail sales beat forecasts with 1.2% rise in May

British retail sales rebounded more strongly than expected in May, supported by favourable weather conditions and promotional activity by retailers, according to official data released on Friday.

The figures come despite ongoing concerns about rising living costs and uncertainty linked to the conflict involving Iran.

Data from the Office for National Statistics showed that retail sales volumes increased by 1.2% in May, following a revised decline of 1.0% in April.

On an annual basis, retail sales volumes were 3.2% higher than a year earlier, outperforming economists’ forecasts of a 1.9% increase.

Non-food and online retailers drive growth

Excluding petrol sales, overall retail sales volumes also rose by 1.2% compared with April and were up 4.6% from the same period last year.

The ONS said retailers reported that warmer weather and promotional campaigns helped drive stronger sales, particularly among non-store retailers and department stores.

Non-food retailers recorded gains during the month, with department stores benefiting from favourable weather conditions.

Computer and telecommunications retailers also continued to see growth, supported by product launches in March 2026.

Meanwhile, non-store retailers experienced strong trading periods during both March and May.

The ONS further estimated that the quantity of goods purchased in the three months to May 2026 increased by 0.4% compared with the three months to February 2026.

Consumer confidence remains fragile

Despite the stronger retail performance, signs of caution remain among British consumers.

A separate survey released earlier on Friday showed that consumer confidence remained unchanged in June.

However, younger consumers were reported to be the least optimistic in two years regarding both the economy and their personal financial situation.

The survey also indicated that households have been the least willing to make major purchases since January 2025, suggesting that financial concerns continue to weigh on spending decisions.

Retailers monitor impact of Middle East conflict

Major British retailers have continued to highlight uncertainty stemming from the conflict in the Middle East.

While some retailers pointed to reasons for optimism following US President Donald Trump's interim agreement with Iran, they said they remain focused on monitoring the potential impact on costs.

Supermarket groups Tesco and Morrisons both reported a slowdown in sales growth since the conflict began.

Tesco, the UK's largest supermarket group, stated that favourable weather conditions were likely to contribute more to sales growth than strong performances by England and Scotland in the men's football World Cup.

The latest ONS figures suggest that weather-related spending and retailer promotions played a key role in lifting sales during May, helping the sector recover from April's decline even as consumers remain selective about their purchases and broader economic uncertainty persists.