Retail sales saw an unexpected increase in March, buoyed by favourable weather conditions, the latest data reveals.
The Office for National Statistics reported a 0.4 per cent rise in retail sales volumes for March 2025, following a 0.7 per cent increase in February, as reported by .
On a quarterly basis, sales volumes climbed by 1.6 per cent, and on an annual basis, they rose by 1.7 per cent – marking the quickest pace in four years.
Sagar Shah, Associate Partner at McKinsey, described the figures as a "positive surprise".
He added: "It also marks the largest three-month rise in sales volumes since July 2021 – a sign there is some underlying resilience in shopper behaviour and the big discounts in the early part of the quarter brought back consumers."
Earlier in the year, heavy discounting had pushed shops into deflation.
Matt Dalton, Consumer Sector Leader at Forvis Mazars, commented: "Strong sales growth is a sign that the recent improvement in real incomes is finally translating into higher consumption."
He noted that this trend was already apparent in the final quarter of last year, when consumption was the larger contributor to economic growth.
Dalton expressed moderate optimism about the coming months, given the healthy state of consumption fundamentals – incomes, employment levels, and household balance sheets. However, he cautioned about the potential impact of rising uncertainty.
"Surveys of consumer sentiment are beginning to show some cracks, with willingness to spend falling on the back of greater pessimism about the future of the economy," he said.
Both GfK's and the British Retail Consortium's latest consumer sentiment surveys reflect a sharp deterioration in confidence due to worldwide geopolitical uncertainty exacerbated by Trump's tariffs.
"Households remain in a good place to ramp up spending with the savings rate extremely elevated and real wages rising. But the drop in consumer confidence suggests that households' saving will remain elevated," remarked Thomas Pugh, economist at RSM º£½ÇÊÓƵ.
Pugh noted a fresh set of significant costs hitting retailers, which have come into play earlier this month.
"The combination of lower confidence and rising prices will be a significant headwind to further sales volumes growth," Pugh observed.
