Overview

• Retail sales volumes increased by 0.4% in March 2025, following a 0.7% rise in February, according to the Office for National Statistics.
• Quarterly sales volumes grew by 1.6% quarter-on-quarter and 1.7% year-on-year, marking the fastest growth rate in four years.
• Heavy discounting earlier in the quarter contributed to deflation in retail prices and boosted consumer spending.
• Improved real incomes have supported higher consumption, but consumer confidence has declined sharply due to geopolitical tariff concerns.
• Retailers face significant new cost pressures introduced this month, which, combined with elevated savings and lower confidence, may hinder future growth.