Crisis Deepens For Independent Retailers With Nearly Half Seeing Sales Fall

New data highlights that the high street crisis has deepened significantly, with nearly half of independent retailers reporting that their sales have fallen compared to last year.

The figures, released by the British Independent Retailers Association (Bira), show that 46% of businesses suffered worse second-quarter trading in 2025 compared to the same period in 2024, as consumers reined in their spending due to stretched household budgets.

The Heartbeat survey, conducted over two weeks from July to August, gathered responses from Bira Group members and the Association of Cycle Traders (ACT). While 45% of respondents said Q2 was much or somewhat better than Q1, this improvement came against the backdrop of Q1 traditionally including the January sales period, with Q2 typically representing quieter trading months.

More concerning, only 13.8% reported Q2 was better than Q2 last year, highlighting year-on-year challenges.

Retailers cited squeezed household finances as a primary concern, with one respondent noting: “Money appears to be tight for households; everyday costs leave households with very little to play with for extra luxuries.”

Another observed that “good weather was keeping people out of the high street.”

When asked about government priorities for the autumn statement, 47% of respondents identified business rates reform as the most critical issue requiring attention. Other priorities included minimising national minimum wage increases, addressing cybercrime, and increasing government spending on policing.

One retailer warned: “The threat of additional tax rises and the outcome of the budget in the autumn may cause further anxiety among consumers and put pressure on sales in the crucial Christmas period.”

Andrew Goodacre, CEO of Bira, commented: “These findings paint a concerning picture of the challenges facing Britain’s independent retailers. With household budgets under pressure and business confidence fragile, our members are facing a perfect storm of rising costs and uncertain consumer demand.

“The government must recognise that independent retailers are the backbone of our high streets and take decisive action to reduce the amount retailers actually pay for business rates, especially as next year many thousands will pay more. Without this support, we risk losing the diverse, vibrant retail landscape that makes our communities special.”

NamNews Implications:

• Given the government’s focus on filling ‘black holes’…
• …breath-holding re a fundamental reform of business rates in the Autumn Budget might not be advisable.
• In fact, pragmatists can benefit more from constant monitoring of their exposure to key retailers...
• i.e. Divide the average amount of credit outstanding by your net margin on that retailer and multiply by 100...
• ...to calculate the incremental sales required should the retailer go bust.

Retail Sales Tumble After ‘Dismal’ Month For Supermarkets

Retail sales in the UK suffered their steepest drop in 18 months last month as consumers cut back on purchases of food and household goods.

Figures from the Office for National Statistics (ONS) show sales volumes slid 2.7% month-on-month in May, a much worse result than the 0.5% decline forecast by economists.

After a 4.7% jump in April, food stores saw a drop of 5% in May. This was led mainly by reduced volumes in supermarkets as shoppers made cutbacks amid rising inflation in the sector, alongside reduced sales of alcohol and tobacco products.

In non-food stores, sales volumes slid 1.4% over the month, mainly because of falls in clothing (-1.8%) and household goods (-2.5%). The downturn was blamed on reduced footfall and consumers completing home projects earlier than usual this year because of good weather.

The monthly fall is the first this year and follows a 1.3% rise in April when unusually sunny weather boosted demand. On a year-on-year basis, retail sales volumes were down 1.3% in May.

The disappointing figures come amid growing evidence that the UK economy is cooling after a robust start to the year. The economy contracted in April by 0.3% (ONS) as businesses cut jobs and cancelled investment plans in response to higher taxes and the uncertainty created by Donald Trump’s tariff war.

Paul Dales, Chief UK Economist at Capital Economics, commented: “The sharp 2.7% m/m drop back in retail sales volumes in May adds to other evidence that the burst of economic growth in Q1 is over. That said, consumer spending may still outperform other areas of the economy this year.”

Meanwhile, Nicholas Found, Head of Commercial Content at Retail Economics, said: “May’s retail performance underlines a shift in consumer behaviour, with households putting value at the centre of spending decisions and pulling back on non-essential purchases. This follows a tough April that saw discretionary budgets squeezed by rising household bills.

“The cost of living remains the dominant concern for households. An uptick in food inflation is especially visible to shoppers, acting as a psychological anchor on confidence that hits non-essential retail spending.

“Households are deferring spending on full-price fashion, big ticket home items and other discretionary goods, instead prioritising travel and experiences into the summer.

“Retailers are now in the precarious position of needing to stimulate demand without eroding margins. But with a £6.5bn surge in operating costs this year, driven by increases in employment costs, business rates and utilities as our research with Barclays Corporate Banking shows, many are entering the summer trading period under significant pressure.”

NamNews Implications:

• Hopefully, only the authorities are surprised by these developments…
• i.e. any realistic business sees a market made up of uncertainties and inevitabilities…
• …where any real growth has to come at the expense of rivals.
• Deep down, people don’t trust what they are being told…
• …and are cutting back accordingly.