UK Retail Downturn Eases in May

2026-05-26 10:11 By Agna Gabriel 1 min. read

The CBI retail sales balance improved to -46 in May 2026 from -68 in April, beating market expectations of -60, with retailers expecting a further moderation to -36 next month.

Sales remained below seasonal norms and demand stayed weak, while retail sentiment remained negative for a second straight year despite a slower deterioration than in previous quarters.

Retail selling price inflation eased to its slowest pace since February 2025, with the balance falling to 28 from 41.

Retailers also signalled further cuts to investment and hiring plans, with capital expenditure expectations falling to their weakest level since February 2025.

Employment in the sector continued to decline, although at a slower pace.

CBI economist Charlotte Dendy said the slowdown in price growth highlights weak consumer demand and warned that firms continue to face pressure from high operating costs, while calling for business rates reform, lower energy costs and reduced regulatory burdens to support the sector.



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UK Retail Downturn Eases in May
The CBI retail sales balance improved to -46 in May 2026 from -68 in April, beating market expectations of -60, with retailers expecting a further moderation to -36 next month. Sales remained below seasonal norms and demand stayed weak, while retail sentiment remained negative for a second straight year despite a slower deterioration than in previous quarters. Retail selling price inflation eased to its slowest pace since February 2025, with the balance falling to 28 from 41. Retailers also signalled further cuts to investment and hiring plans, with capital expenditure expectations falling to their weakest level since February 2025. Employment in the sector continued to decline, although at a slower pace. CBI economist Charlotte Dendy said the slowdown in price growth highlights weak consumer demand and warned that firms continue to face pressure from high operating costs, while calling for business rates reform, lower energy costs and reduced regulatory burdens to support the sector.
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The CBI's monthly retail sales volume measure tumbled to –68 in April 2026, a 16-point drop and the lowest reading since the series began in 1983. The figure, far worse than the expected –48, marks the steepest year-over-year decline in retail activity in over four decades, as the escalating Iran war intensifies household inflation concerns. The downturn extended beyond physical stores, with online retail sales volumes crashing at the fastest pace since January 2024 (–51 from –11), while wholesale sales volumes also contracted sharply (–32 from –31). Outlook for May has also deteriorated sharply, with expectations falling to –60 from –49, the most pessimistic forecast since March 2021 during the height of the COVID-19 pandemic.
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