The non-food sales saw a modest increase of 0.6 per cent, recovering from a 0.4 per cent decline a year earlier. However, this was below the three-month average growth of 1.1 per cent, though better than the 12-month average decline of 0.8 per cent.
UK retail sales rose by 1.1 per cent YoY in March, down from 3.5 per cent last year, with modest non-food growth and stronger online sales.
BRC noted Easter timing, improved weather, and Mother’s Day boosted demand.
However, rising costs, including £7 billion (~$8.74 billion) in new government-imposed expenses, pose inflation risks.
Retailers are also facing global supply chain uncertainties.
In-store non-food sales dipped by 0.1 per cent, compared to a slight 0.1 per cent rise in March 2024, underperforming the three-month average growth of 0.6 per cent, yet faring better than the 12-month average drop of 1.7 per cent.
The online non-food sales rose by 1.8 per cent, improving from a 1.4 per cent fall last year, though slightly under the three-month average of 1.9 per cent. The online penetration rate increased to 37.1 per cent in March from 36.6 per cent a year earlier, exceeding the 12-month average of 36.8 per cent, BRC said in a press release.
“Despite a challenging global geopolitical landscape, the small increase in both food and non-food sales masked signs of underlying strengthening of demand given March 2025’s comparison with last year’s early Easter,” said Helen Dickinson, chief executive at BRC.
“Since the start of April, retailers have had to contend with £5 billion pounds of new government-imposed costs because of increases to the National Living Wage and National Insurance. This rises to £7 billion (~$8.74 billion) when the new packaging tax comes into effect in October and will undoubtedly increase inflation later in the year and hold back critical investment in high streets across the country. Government has ample opportunities to kick start that investment by ensuring that no shop pays more as part of their planned reforms to business rates and that the Employment Rights Bill doesn’t reduce the availability of entry level and part time jobs. Investment and growth are what the economy needs right now,” added Dickinson.
“As spring arrived, house and garden related purchases and gifts for Mother’s Day drove retail sales growth in March. Amidst downbeat consumer confidence in the UK’s economic outlook, and many households facing rising costs, retail sales growth feels an achievement,” said Linda Ellett, UK head of consumer, Retail & Leisure, KPMG.
“But with non-food sales only climbing around 1 per cent on average, competition means there are some retailers really struggling whilst others win, especially online. Retailers will be pushing for higher growth rates as we move toward summer and holiday season, particularly as they are now paying higher wage costs and facing volatility and potential impact on their supply chains due to global tariffs,” added Ellett.
Fibre2Fashion News Desk (SG)
