UK retail sales drop by most in nearly a year as drivers buy less fuel
April Retail Sales Data and Economic Impact
By Suban Abdulla
LONDON, May 22 (Reuters) - British retail sales fell by the most in nearly a year in April as fuel sales plummeted, according to official figures published on Friday that added to signs of waning consumer spending against the backdrop of the Iran war and rising energy costs.
Retail Sales Performance
Retail sales volumes slid by 1.3% in April from March, the biggest monthly decline since May 2025 and sharper than the 0.6% decline expected by economists.
Fuel Sales and Consumer Behavior
Fuel volumes plunged by more than 10% as users saved fuel having stocked up in March, the Office for National Statistics said. April's drop in fuel sales was the largest monthly fall since the COVID-19 pandemic.
Excluding fuel, sales volumes were down a less severe 0.4%, close to the Reuters poll forecast for a drop of 0.3%.
Category Breakdown
Sales fell across every category except food. Clothing sales fell to their lowest level since June last year, with retailers citing weak confidence and variable weather.
Sterling weakened briefly against the dollar after the data was published but soon recovered.
Consumer Confidence and Market Response
"Concerns around the impact of the Iran conflict on the cost of living, alongside higher mortgage costs and continued pressure on household finances, are weighing heavily on consumer confidence," said Samuel Edwards, head of client portfolio management at financial services firm Ebury.
Consumer Confidence Weak
Earlier on Friday, a survey showed low levels of consumer confidence rose only slightly in May with households the least willing to make big item purchases in nearly a year and a half.
Major British retailers say uncertainty over the impact of the Iran war is weighing on their businesses and customers. They also say higher tax and more regulation are holding them back.
Retailers Bucking the Trend
Some firms are bucking the trend. Fashion retailer Next posted better-than-expected first quarter sales and electricals retailer Currys edged up its profit outlook.
Year-on-Year Comparison and Broader Economic Context
Compared with a year earlier, overall sales were flat, the ONS said, against economists' expectations of a 1.3% rise.
Excluding fuel sales, volumes were up 1.1%, weaker than the Reuters poll forecast of a rise of 1.5%.
Bank of England and Government Borrowing
The Bank of England has held interest rates as it weighs up the risk of weakening growth in the economy and labour market against the impact of the energy price shock on inflation.
Separate ONS data showed higher-than-expected government borrowing last month, underscoring the scale of the challenge facing finance minister Rachel Reeves.
(Reporting by Suban Abdulla; additional reporting by James Davey; editing by William James)
