UK retail gross sales elevated by 0.7% in March 2026, following a 0.6% decline in February, in keeping with the newest knowledge from the Workplace for Nationwide Statistics.
Complete retail gross sales, excluding automotive gasoline, rose by 0.2% on a month-on-month foundation, with non-food shops seeing 0.7% progress.
Here is how analysts interpreted the newest figures.
McKinsey & Firm
In accordance with Hai-Ly Nguyen, affiliate companion at McKinsey & Firm, the 0.2% progress indicated that structural restoration is just not but right here, and added, “Meals gross sales volumes noticed a 0.8% decline regardless of the early Easter weekend. This alerts that [the] underlying demand in grocery additionally stays weak.”
Nguyen additionally highlighted that retailers are going through rising prices as soon as once more throughout vitality, transport, packaging, and components. This follows value will increase of 20–30% is a few classes since 2021.
She added, “Customers stay cautious, with practically half nonetheless actively making an attempt to avoid wasting and plenty of are involved about the impression of inflation and international conflicts on their disposable revenue.
“Development should be earned by sharper worth and execution. Manufacturers might want to win customers even earlier of their procuring journey: round a 3rd of UK customers are already utilizing AI to find and resolve on manufacturers and purchases.”
AJ Bell
Danni Hewson, head of economic evaluation at AJ Bell, believes the rise in retail gross sales in March is “unhealthy information for the sector” as customers bought petrol and diesel amid rising costs.
Hewson defined, “Folks can solely spend a pound as soon as, and in the event that they’re selecting to shell out greater than regular on gasoline, they’ll have much less to spend on different purchases.”
Hewson additionally highlighted that buyers are adopting a cautious method and plenty of are “saving and padding out their emergency pots”. Nonetheless, customers nonetheless have the urge for food to take pleasure in small treats.
“The large winners are corporations like L’Oréal, which give these little luxuries with out taking an enormous chunk out of our discretionary budgets. A brand new perfume, lipstick or some skincare could make folks really feel higher as they cope with the deteriorating financial image round them,” she added.
Hewson concluded, “However when you think about that March’s figures this 12 months included Good Friday, you get a measure of how cautious individuals are being with their money.
“If costs for necessities do spike and the weekly store turns into an more and more painful chore, then the already bruised retail sector is prone to take one other punch.”
Alvarez & Marsal
Erin Brookes, European retail and client lead at Alvarez & Marsal, believes that the general momentum stays modest regardless of gross sales choosing up in March.
Brookes defined, “Whereas the uptick suggests some resilience in client spending, demand continues to be formed by mounting strain on family budgets and weak confidence.
“Motor gasoline costs have risen by 8.7% month on month, the sharpest improve since June 2022, including a recent layer of price strain that buyers will really feel instantly.”
Consequently, customers might as soon as once more deal with necessities, setting apart discretionary purchases amid geopolitical uncertainties.
She additionally added that retailers want to keep up management throughout margins, buyer expertise and operational resilience to navigate this risky setting.
British Retail Consortium
The British Retail Consortium additionally echoed comparable sentiments, highlighting geopolitical volatility affecting client confidence, which has reached a report low.
Harvir Dhillon, economist on the British Retail Consortium, said, “Ongoing geopolitical volatility has dragged down client confidence, which is now at a report low. And whereas increased inflation could ship the sugar excessive of larger gross sales values, volumes are prone to drop because the cost-of-living squeeze will get worse.
“Authorities ought to deal with preserving home coverage prices right down to keep away from including additional inflationary pressures, from the Employment Rights Act and new wholesome meals guidelines, to non-commodity costs which make up such a big proportion of vitality payments.”
