The accountancy firm BDO has reported that total sales on UK high streets in May grew by 3.4% compared to the same month last year, as warm spring weather brought a much-needed boost to retailers struggling with the economic fallout from the US-Israel war on Iran.
Footfall Recovers After April Slump
Figures from the British Retail Consortium (BRC) and a separate survey by BDO revealed a bounce-back in footfall during May, reversing a sharp decline in April. The recovery coincided with a rise in consumer confidence as shoppers began to overcome the impact of soaring petrol and diesel prices linked to the Middle East conflict, which started in late February.
The BRC recorded a 2.6% decline in footfall in May from the same month in 2025, but this was a significant improvement from the 10.7% year-on-year slump in April. High streets performed best, with a decline of just 1.7%, while shopping centres fared worst, dropping 2.4%.
Weather Impact and Consumer Confidence
Helen Dickinson, chief executive of the BRC, said: "While total UK footfall remained down on last year, it was a significant improvement on April's double-digit drop." She noted that soaring temperatures in the last week of May deterred many shoppers, ending hopes of a positive footfall figure. "Only high streets bucked the trend, as those who were out and about took the opportunity to pop into their local stores," she added.
A poll by YouGov and the Centre for Economics and Business Research found that consumer confidence in May rose by the most since 2021, with its index climbing 2.6 points to 104.9 – the biggest increase in five years. Any score above 100 indicates positive sentiment. YouGov attributed the more optimistic mood to improving perceptions of household finances and house prices, with the housing market outlook rising from 128.6 to 130.5.
Economic Outlook and Retail Challenges
The figures are the latest sign that the UK economy is faring better than feared at the start of the US-Israel war on Iran. This week, the OECD upgraded its UK growth forecast for 2025 to 0.9%, up from 0.7% in March. However, unemployment has unexpectedly risen to 5%, and energy bills are expected to increase sharply later in the year.
BDO and the BRC noted that retailers continue to face a tough environment, with consumers hit by tax rises and international conflict. However, high street shop owners are hopeful that the World Cup this month will boost sales. Sophie Michael, head of retail at BDO, warned that uncertainty from international conflict and rising energy prices could offset any temporary gains. "The longer-term picture for retailers remains fairly bleak; already high costs may go even higher due to the closure of the Strait of Hormuz and increasing energy prices, which may also force consumers to tighten their purse strings. Retailers will have welcomed this month's sales growth but must brace themselves for further challenges ahead," she said.
