UK retail sales rose 1.7 per cent year on year in March, offering retailers a modest boost after a weaker February, but rising fuel costs and geopolitical uncertainty continue to cast a shadow over the sector.

According to the latest figures from the Office for National Statistics, retail sales also increased 0.7 per cent month on month in March. Over the three months to March 2026, retail sales volumes were up 1.6 per cent compared with the previous three-month period and 2.7 per cent higher than the same period a year earlier.

Automotive fuel saw the strongest monthly growth, jumping 6.1 per cent, while non-store retailing increased 1.4 per cent. Food store sales, however, fell 0.8 per cent.

The figures suggest shoppers continued to spend in March, with non-food categories including clothing, cosmetics and online retail showing signs of resilience. However, the broader picture remains fragile as households face mounting cost pressures and confidence remains subdued.

Erin Brookes, European retail and consumer lead at Alvarez & Marsal, said the March uplift offered “some tentative relief” following a weak February, but warned that overall momentum remained modest.

“While the uptick suggests some resilience in consumer spending, demand continues to be shaped by mounting pressure on household budgets and weak confidence,” she said.

Brookes pointed to an 8.7 per cent month-on-month rise in motor fuel prices, the sharpest increase since June 2022, as a fresh pressure point for consumers.

“Against a backdrop of global uncertainty, this is likely to reinforce a focus on essentials and leave discretionary categories vulnerable,” she added.

She also warned that retailers are grappling with rising costs and supply chain disruption linked to the conflict in the Middle East, increasing the likelihood of price rises.

“To navigate this increasingly volatile environment, retailers must maintain control across margins, customer experience and operational resilience,” she said.

Alice Cowley, managing director at Accenture UK’s retail practice, said the monthly increase would provide some encouragement, despite the difficult backdrop.

“The 0.7 per cent rise in retail sales in March will give some encouragement to retailers in an otherwise challenging environment with strong headwinds,” she said. “Easter delivered an expected boost to food sales, while drier weather encouraged shoppers to get back onto the high streets after a wet February.”

However, she cautioned that the timing of Easter may have flattered the figures.

“This apparent momentum should be treated with caution. The early timing of Easter is likely to have inflated March’s figures, potentially masking a more fragile economic backdrop,” Cowley said.

She added that instability in the Middle East was pushing up fuel prices and feeding through into retailer input costs, while consumers were becoming more selective in their discretionary spending.

“Retailers now face a more immediate test of supply chain resilience, as geopolitical tensions continue to disrupt global trade flows,” she said. “Many will be prioritising building more agile and responsive supply chains. Greater visibility over stock, sourcing and costs to react quickly to disruption will be critical.”

Sandra Prince, head of consumer at Lloyds, said March spending had been helped by seasonal and cultural events in the retail calendar, but consumer behaviour was clearly shifting.

“Consumers are increasingly prioritising essential items and taking a more considered approach to discretionary purchases,” she said.

Prince said retailers remained confident in their business models, but noted that many were adjusting their strategies across pricing, channels, customer engagement and loyalty schemes in response to global uncertainty and softer consumer sentiment.

Jacqui Baker, head of retail at RSM UK said improved weather had helped lift sales in categories such as fashion, health and beauty.

“The slight improvement in weather helped to lift retail sales in March as consumers refreshed their wardrobes for the spring season and prioritised ‘feel good’ categories such as health, beauty and wellbeing,” she said.

But she warned that the uplift could prove short-lived as cost pressures stemming from the conflict in the Middle East filter through to consumers.

“The 20 per cent jump in fuel prices alone since the start of the war is enough to hit consumer confidence, which fell again from -21 in March to -25 in April,” Baker said.

She added that further headwinds were building, including rising energy costs, inflation and heightened consumer nervousness, although elevated household savings could soften the blow in the short term.

“The gloomy outlook for retail sales combined with increased staff and business rates costs means there are tougher times ahead for retailers,” she said. “With some retailers resorting to job cuts to mitigate increased costs, it’s clear the government needs to take action to support this vital industry before it’s too late.”

Thomas Pugh, chief economist at RSM UK, said the headline 0.7 per cent rise in retail sales volumes overstated the strength of underlying demand, given the sharp increase in fuel sales.

“A good portion of this was due to a whopping 6.1 per cent month-on-month rise in fuel sales, the largest since April 2021, which is a clear sign that consumers tried to bring forward fuel purchases ahead of price increases,” he said. “Excluding fuel, retail sales volumes increased by a much more subdued 0.2 per cent.”

Pugh warned that April could present a more difficult picture, with falling consumer confidence, higher fuel costs, the prospect of a higher utility price cap in July and rising mortgage costs all threatening disposable incomes.

“That sets a much tougher outlook for retailers than we were considering before the war,” he said.

Click here to sign up to Retail Gazette‘s free daily email newsletter