Retail sales grow ahead of expectations in March as consumers stock up on fuel

Excluding automotive fuel, sales volumes grew by 0.2% on the month. This included a rise in clothing sales, which retailers said was due to the warm weather.

The 0.7% rise was ahead of the 0.1% growth forecast by a poll of Reuters economists.

Also on the up were volumes at computer and telecom stores, as well as online retailers. March saw a number of major tech releases, including a suite of new Apple products, including the budget-friendly MacBook Neo.

This rise was partially offset by the fall in commercial art gallery sales, that had helped drive surprisingly strong growth in January’s figures. Food sales volumes also fell by 0.8% on the month.

“While it’s reassuring to see sales volumes improve in March, continued growth will depend on the resilience of consumer budgets as inflation rises. This should also further emphasise retailers’ need to cater towards value-driven consumers – those looking for quality products at the best price point,” said Deloitte retail partner Cande Cooper.

Across the January to March quarter, sales volumes rose by 1.6% on the final three months of last year. The ONS partially attributed this to online sales and a strong quarter for beauty retailers, with new collections being launched.

The figures come despite falling consumer confidence figures. The GfK release for April showed a four point fall, with confidence now at its lowest level since October, 2023. 

“Ongoing geopolitical volatility has dragged down consumer confidence, which is now at a record low. And while higher inflation may deliver the sugar high of greater sales values, volumes are likely to drop as the cost of living squeeze gets worse,” said BRC economist Harvir Dhillon.

Inflation figures released earlier this week showed that the consumer prices index had risen to 3.3% in March, up from 3% in February, largely due to increased fuel prices.