Retail sales see biggest rise for nearly four years

UK retail sales rose at the fastest pace for nearly four years in the first few months of the year, after warmer weather helped boost sales in March.

Between January and March, sales volumes were up 1.6% from the previous three months, according to the Office for National Statistics, which was the biggest quarterly rise since July 2021.

March's sunny weather provided a boost for garden centres, and demand for clothing and DIY goods also improved. However, the ONS said food sales volumes fell, particularly at supermarkets.

Analysts also warned that sales could weaken in the months ahead after a separate survey suggested consumer confidence fell in April.

Sales volumes in March rose 0.4%, an unexpectedly strong figure after analysts had predicted a 0.4% fall.

Clothing and shoe stores saw the strongest growth, with sales up 3.7% from the previous month.

The sunny weather in March also helped sales at garden centres, which reported "robust trading", the ONS said.

Sales at non-food stores rose by 1.7% over the month, but this was partly offset by food store sales volumes falling 1.3%.

"March was a real sweet spot for many households with inflation continuing to cool and wage increases not yet ravaged by an increase in bills," said Danni Hewson, head of financial analysis at AJ Bell.

"For retailers these figures will be heartening, coming after what was a disappointing Christmas for the sector. But most will be braced for a change in fortunes."

A separate survey indicating that consumer confidence fell sharply in April has suggested that sales may not grow as quickly in the months ahead.

Market research firm GfK said confidence fell this month to its lowest level since November 2023, as people faced rising bills and became more pessimistic about the prospects for the economy.

"Consumers have not only been grappling with multiple April cost increases in the form of utilities, council tax, stamp duty, and road tax, but they are also hearing dire warnings of renewed high inflation on the back of the Trump tariffs," said Neil Bellamy, consumer insights director at GfK.

Alex Kerr, UK economist at Capital Economics, said the sales performance in March "may be as bright as it gets".

"March's rise was largely due to unusually sunny weather and the drop in consumer confidence in April after the US tariff chaos suggests that households may start to spend more cautiously in the coming months," he said.

However, Simon French, chief economist at Panmure Liberum, noted that the research carried out by GfK was in the first two weeks of April, when the bill rises and tariff announcements were fresh in people's memories.

"The question being asked is whether that was a particularly unfortunate timing and it's not necessarily reflective of how consumers will feel later in the year," he told the BBC's Today programme.

"Later in the year we're expecting interest rate cuts and a fall in energy costs. Will that start to boost consumer sentiment? I suspect it will."