Sprouting angiogenesis is an essential vascularization mechanism consisting of sprouting and remodelling. The remodelling phase is driven by rearrangements of endothelial cells (ECs) within the post-sprouting vascular plexus. Prior work has uncovered how ECs polarize and migrate in response to flow-induced wall shear stress (WSS). However, the question of how the presence of erythrocytes (widely known as red blood cells (RBCs)) and their impact on haemodynamics affect vascular remodelling remains unanswered. Here, we devise a computational framework to model cellular blood flow in developmental mouse retina. We demonstrate a previously unreported highly heterogeneous distribution of RBCs in primitive vasculature. Furthermore, we report a strong association between vessel regression and RBC hypoperfusion, and identify plasma skimming as the driving mechanism. Live imaging in a developmental zebrafish model confirms this association. Taken together, our results indicate that RBC dynamics are fundamental to establishing the regional WSS differences driving vascular remodelling via their ability to modulate effective viscosity.