Retail sales in Britain rose more than expected in March, driven by increased spending on petrol and diesel as motorists filled up their vehicles, official figures show.
Sales Growth Exceeds Forecasts
The Office for National Statistics (ONS) reported that retail sales volumes increased by 0.5% in March compared with February, surpassing economists' expectations of a 0.3% rise. On an annual basis, sales were 2.1% higher than in March 2025.
The growth was largely attributed to a surge in fuel sales, which jumped by 3.2% month-on-month, the largest increase since November 2024. This reflected higher demand for petrol and diesel as motorists resumed regular travel patterns after the winter period.
Non-Food Stores Struggle
However, the overall picture was mixed. Sales at non-food stores fell by 0.4% in March, with department stores and clothing retailers reporting weaker demand. This suggests that consumers are prioritizing essential spending on fuel and food over discretionary items.
Food store sales rose by 0.8%, driven by Easter-related purchases, while online retail sales increased by 1.1%.
Economic Implications
The stronger-than-expected retail data provides a boost to the UK economy, which has been grappling with high inflation and sluggish growth. However, economists caution that the rise in fuel sales may not be sustainable if global oil prices continue to rise.
"The increase in retail sales is welcome, but it is heavily reliant on fuel spending, which is volatile," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics. "Consumers are still under pressure from high living costs, and we expect spending to moderate in the coming months."
The ONS noted that retail sales volumes remain 1.5% below their pre-pandemic level in February 2020, indicating that the sector has not fully recovered.
Outlook
Looking ahead, retailers face an uncertain outlook as the cost-of-living crisis continues to squeeze household budgets. The Bank of England is expected to raise interest rates further to combat inflation, which could dampen consumer spending.
"The retail sector is navigating a challenging environment," said Helen Dickinson, chief executive of the British Retail Consortium. "While March's figures are encouraging, retailers remain cautious about the months ahead."
