Retail sales over the first quarter of 2025 rose at their fastest pace for nearly four years after warmer weather helped boost demand in March.
Data from the Office for National Statistics shows sales volumes between January and March were up 1.6% compared to the last quarter of 2024 and 1.7% higher than the same period last year.
In March, sales volumes rose 0.4%, an unexpectedly strong figure after analysts had predicted a 0.4% fall. Good weather boosted sales of clothing and outdoor items, with non-food stores seeing volumes increase by 1.7% over the month.
This was partly offset by food store volumes sliding 1.3% following a 2.2% fall in February. Supermarkets had the largest downward contribution.
However, the March figures came before US President Donald Trump’s “liberation day” global tariff war announcements at the beginning of this month, with data released today confirming that consumer confidence has since taken a significant hit.
GfK’s long-running Consumer Confidence Index decreased by four points to -23 in April, the lowest level for well over a year. This was led by an eight-point fall in how people see the wider economy in the coming year, whilst the future indicator on personal finances also slipped badly, dropping four points as households faced a fresh wave of rising household bills.
Nicholas Found, Head of Commercial Content at Retail Economics, commented: “March offered glimmers of hope for retailers, with warmer weather and longer evenings encouraging households to spend on gardening and DIY, while Mother’s Day provided a timely boost for beauty and gifting categories.
“But beneath these green shoots, discretionary spending remains under significant strain. Affluent households with savings have largely chosen to hold back on retail spending, reflecting shifting priorities. Travel continues to outshine retail as households prioritise experiences over goods, while big-ticket items like furniture remain on the back burner.
“With consumers bracing for a fresh wave of rising household bills, geopolitical tensions weighing on confidence and Budget-related costs kicking in, retailers face an uphill battle to protect margins, sustain investment, and navigate an increasingly complex trading environment.
“The outlook is clouded further by uncertainty around US trade tariffs, which have the potential to disrupt shipments if orders are cancelled and routes are impacted. For shoppers, the focus remains firmly on value and carefully timed promotions, leaving big-ticket spending stuck in second gear.”
NAM Implications:
- Key standout has to be today’s confirmation that following the tariff announcement…
- …consumer confidence has since taken a significant hit.
- (Understatement of 2025, a must-be)
- i.e. don’t book summer holidays yet…
