Retail sales rise in March but tariff turmoil signals trouble ahead
Retail sales rose in March despite low consumer confidence, according to new data, but tariff uncertainty is likely to dampen the recovery.
Total retail sales increased by 1.1 per cent year on year in March, with 1.6 per cent growth in food sales and 0.6 per cent growth in non-food sales.
While this was below last year’s growth rate, the small increase in both food and non-food sales “masked signs of underlying strengthening of demand given March’s comparison with last year’s early Easter”, Helen Dickinson, chief of the British Retail Consortium, said.
“The improving weather made for a particularly strong final week, with gardening and DIY equipment flying off the shelves [and] jewellery and beauty products were helped by Mother’s Day.
“Retailers are making final preparations for Easter, with food expected to be the big winner next month,” Dickinson added.
The spring boost came despite low consumer confidence.
Wage growth, instead, may be behind the strong retail sales: annual wages, excluding bonuses, grew 5.9 per cent between November 2024 and January 2025.
“Amidst downbeat consumer confidence in the UK’s economic outlook, and many households facing rising costs, retail sales growth feels an achievement,” Linda Ellett, UK head of consumer at KPMG, said.
Ellett said retailers will be pushing for even higher growth rates as the year goes on due to the tougher business environment.
“They’re now paying higher wage costs and facing volatility and potential impact on their supply chains due to global tariffs,” Ellett said.
CEO of IGD Sarah Bradbury, however, warned that achieving higher retail sales might be tricky in the current business environment.
“While half-term, Bank Holidays, and Easter may temporarily lift sales, the potential negative impact of US tariffs and recession concerns are likely to keep confidence low.
“We may have already seen the peak for some time,” Bradbury said.