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Spring Sunshine Sparks May Footfall Bounce‑BackMay saw a noticeable rise in UK high‑street visits as sunny weather provided a brief respite from the economic strain caused by the US‑Israel war on Iran. The British Retail Consortium (BRC) and accountancy firm BDO both reported a reversal of the sharp footfall decline recorded in April.Retail Sales Edge Up While Overall Footfall Stays Below Last YearBDO reported that total high‑street sales grew 3.4% compared with May 2025. The BRC noted a 2.6% decline in overall footfall versus May 2025, but highlighted a much steeper 10.7% slump in April.High streets: footfall down 1.7% YoYShopping centres & retail parks: footfall down 2.4% YoYConsumer Confidence Climbs to Highest Level Since 2021A YouGov poll, in partnership with the Centre for Economics and Business Research, showed the confidence index rise 2.6 points to 104.9 in May, the biggest jump in five years. Respondents also reported improved perceptions of household finances and house‑price outlooks (from 128.6 to 130.5).Mixed Economic Signals Amid Rising CostsThe OECD upgraded its UK growth forecast to 0.9% for 2026, up from 0.7% in March, but unemployment has unexpectedly risen to 5% and energy bills are set to climb sharply later in the year.Future Outlook: Seasonal Boosts Countered by Geopolitical and Energy RisksIndustry leaders such as Helen Dickinson, BRC chief executive, caution that the late‑May heat wave dampened footfall and that any uplift from events like the World Cup may be offset by ongoing uncertainty from the conflict‑driven energy price surge and the closure of the Strait of Hormuz. Sophie Michael, head of retail at BDO, warns that higher costs could force consumers to tighten spending, keeping the longer‑term retail outlook “fairly bleak”.

UK shoppers are likely to see higher prices for many months, as inflation in shops climbs and global shipping disruptions combine with soaring energy costs, according to the British Retail Consortium and the British Chambers of Commerce.Rising Shop Price Inflation Signals Persistent Cost PressuresThe British Retail Consortium reported that shop price inflation rose 1.2% year‑on‑year in May, slightly above the three‑month average of 1.1%. Furniture, health and beauty items led the recent price gains.Inflation Numbers Reveal Food Price Relief Amid Broader Upward TrendIntense supermarket competition kept food price inflation down to 2.7% in May, below the longer‑term average of 3.1%. However, overall shop price pressure remains.Supply Chain Disruptions and Energy Costs Threaten Consumer WalletsHigh oil prices and the prolonged closure of the Strait of Hormuz have increased shipping costs.Manufacturing firms report 68% already affected by the turmoil, with another 23% bracing for impact.Three‑quarters of companies expect their energy bills to rise in the next year.Helen Dickinson, BRC chief executive, warned that businesses cannot absorb these costs indefinitely.Outlook: Continued Price Upside Through the Summer MonthsBoth the BRC and the British Chambers of Commerce caution that even a cease‑fire would leave “economic reverberations” for many months. Analysts anticipate retailers extending promotions, but overall price pressure is likely to persist through the summer.

Retailers Slash Prices as Shop Inflation DeceleratesBritish retailers have turned to aggressive discounting across clothing, furniture and DIY categories to stimulate demand, prompting the British Retail Consortium (BRC) to report a slowdown in shop price inflation.April Shop Price Inflation Falls to 1% YoYAccording to the BRC’s monthly survey, compiled with NielsenIQ, shop price inflation rose by 1% year‑on‑year in April, down from 1.2% in March and below the three‑month average of 1.1%. Non‑food price inflation turned negative, registering -0.1% YoY versus a modest 0.1% gain in March.Shop price inflation: 1% (April) vs 1.2% (March)Three‑month average: 1.1%Non‑food inflation: -0.1% (April) vs 0.1% (March)Consumer Confidence Erodes Amid Energy ShockHouseholds are tightening belts as the Iran war drives up energy and food costs. A recent GfK survey showed UK consumer confidence in April fell to its lowest level since October 2023. Darren Jones, chief secretary to the prime minister, warned that the UK could face higher food and fuel prices for at least eight months after the conflict ends.Retail Landscape Under Pressure: Volume Drops and Wholesale StrainThe Confederation of British Industry (CBI) found sales volumes “below seasonal norms” in April, with a net balance of 68% of retailers reporting volume declines – the weakest reading since the survey began in 1983. Online retail sales fell at the fastest pace since January 2024, and wholesalers reported similar headwinds.CBI net balance of volume decline: 68% (April) vs 52% (March)Online sales drop: fastest since Jan 2024What the Discount Wave Means for the UK EconomyHelen Dickinson, BRC chief executive, noted that “with weakening consumer confidence, retailers competed harder on price to stimulate more spring spending.” However, she cautioned that the full impact of the Middle‑East conflict on consumer prices is yet to be felt.Mike Watkins of NIQ warned that rising fuel prices are already feeding higher inflation, suggesting the current discount‑driven relief may be short‑lived as supply‑chain costs rise.Outlook: Will Discounts Stall as Costs Rise?The BRC has called on the government to curb shop price inflation by fixing “non‑commodity charges” that make up roughly half of the average business energy bill. If energy‑related costs continue to climb, retailers may have less room to offer deep discounts, potentially reigniting price pressures later in the year.

The UK's retail industry is bracing for the impact of reforms to guaranteed working hours, which could affect over half of retail jobs. The British Retail Consortium (BRC) has warned that the changes, set to take effect from April, may make it harder for shops to employ people, particularly young workers, in part-time roles. The Employment Rights Act will introduce new protections for workers on sick pay, sexual harassment, parental leave, and trade union recognition. Additionally, the act will provide rights to guaranteed hours for those on zero or 'low hours' contracts, flexible working, payment for short-notice cancellation of shifts, and barring fire-and-rehire practices in most circumstances. The BRC, representing major UK retailers, suggests that guaranteed hours protections should only apply to contracts of eight hours a week or fewer, and the reference period to be at least 26 weeks – or ideally a full year. This, they argue, would better reflect seasonal working patterns and ensure reforms address genuine problems without undermining jobs. Helen Dickinson, the chief executive of the BRC, emphasized that flexible retail jobs are vital for millions of people, providing opportunities for students, parents, and those managing health conditions. She warned that if reforms treat flexibility as a problem rather than something workers actively choose, the risk is fewer opportunities and reduced access to work. The BRC noted that 55% of retail roles are part-time, significantly above the UK average of 33%. A survey of 2,000 adults by Opinium for the BRC found that 52% of UK adults think the ability to flex working hours around their lives is important. However, the shop workers' union Usdaw and the TUC have expressed support for the reforms, arguing that they will deliver benefits to those in insecure employment, particularly women and disabled workers, and provide greater job security and predictability for working people.