NAIROBI, KENYA – A significant slowdown in United Kingdom retail spending recorded in October has raised concerns among Kenyan exporters who rely on the UK as a primary market for agricultural products. Data released on Tuesday, 11th November 2025, indicates British consumers are tightening their belts, a trend that could potentially reduce demand for Kenyan goods and impact the country's foreign exchange earnings.

According to figures from the British Retail Consortium (BRC) and advisory group KPMG, UK retail sales growth slowed to 1.6% in October, a notable drop from the 2.3% recorded the previous month and the weakest growth since May 2025. The slowdown was most pronounced in food sales, which decelerated to 3.5%, while non-food sales remained nearly flat at just 0.1% growth.

This consumer caution is attributed to shoppers holding out for Black Friday discounts, expected on 28th November, and anxiety over potential tax increases in the upcoming government budget. Further compounding the issue, separate data from Barclays bank revealed a sharp drop in consumer confidence. A survey found that for the first time since August 2022, all seven of the bank's confidence metrics declined, with confidence in household finances falling significantly.

Implications for Kenya's Economy

The United Kingdom is a critical trade partner for Kenya, representing a significant export destination. In the year ending September 2025, total trade between the two nations surpassed Sh340 billion for the first time, driven by a 14% surge in Kenyan exports. A sustained downturn in UK consumer spending could therefore have direct repercussions for key sectors of the Kenyan economy.

The horticultural sector, including fresh vegetables and cut flowers, is particularly vulnerable. According to the Observatory of Economic Complexity, cut flowers and vegetables are among Kenya's top exports to the UK. An older 2022 government case study noted that the UK is a vital market for these high-value products, which support the incomes of many smallholder farmers. Reduced discretionary spending by UK households could lead to lower sales volumes for these goods, which are often considered non-essential luxuries.

Similarly, Kenya's tea and coffee exports face potential headwinds. In the year to September 2025, beverage exports to the UK, primarily tea and coffee, grew by 12.8% to Sh24.3 billion. A contraction in UK household budgets may lead consumers to switch to cheaper alternatives or reduce overall consumption, affecting demand.

Tourism Sector on Watch

Beyond trade in goods, Kenya's tourism industry is also closely monitoring the UK's economic climate. The UK is Kenya's largest tourism source market in Europe, accounting for 180,639 visitor arrivals in 2024. The decline in UK consumer confidence, especially regarding job security and the ability to spend on non-essential items, could translate into fewer holiday bookings. British travellers are noted for higher per-capita spending and longer stays, making any reduction in their numbers particularly impactful for the local tourism and hospitality sectors.

Contrasting Local Consumer Climate

The situation in the UK contrasts with recent data from Kenya. Kenya's annual inflation rate for October 2025 held steady at 4.6%, remaining below the Central Bank's 5% midpoint target for the 17th consecutive month, partly due to weak domestic demand. According to the Kenya National Bureau of Statistics (KNBS), the monthly inflation rate was 0.2% in October.

While a Q2 2025 survey from TransUnion showed that 61% of Kenyan consumers had cut back on discretionary spending due to economic pressures, it also found that 84% remained optimistic about their household finances over the next 12 months. Furthermore, a Stanbic Bank Kenya Purchasing Managers' Index (PMI) for October 2025 indicated that private sector activity rose to a six-month high, suggesting a degree of resilience in the local economy. This domestic stability, however, does not insulate the export-oriented sectors from international market volatility.

As Kenyan producers and tourism operators observe the unfolding economic situation in the UK, the coming weeks, particularly the Black Friday sales period and the release of the UK budget, will be critical in determining consumer spending patterns and the subsequent impact on the Kenyan economy.