Report Summary

Period covered: 01 March - 04 April 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30-day membership trial now.

Retail Sales Performance:

March saw an uplift in sales powered by an early Easter trading window, with growth increasing to xx% year-on-year according to the Retail Economics Retail Sales Index, up from February’s sluggish xx%.

Spending was strongest in food and health & beauty, with big ticket purchases under more pressure.

Factors impacting the headline performance in the month include:

Early Easter timing: The five-week reporting period included Easter this year, unlike 2025. This materially lifted food and grocery sales, especially Easter eggs, hot cross buns, premium meal deals and seasonal ranges. The effect will reverse in April, creating a tougher read.

Warmer weather: It was the joint tenth warmest March on record for the UK. Southern and central England were notably dry and bright, supporting spring clothing, garden centres, pubs and some DIY missions. The benefit was uneven, with wetter northern and western regions limiting broader gardening momentum.

Mother’s Day: Mother’s Day supported fragrance, beauty, jewellery, flowers, premium grocery and dining-in occasions. Footfall rose in the week leading into the event, and over half of retailers reported a sales boost. The uplift concentrated in smaller indulgences while larger discretionary items saw muted growth.

Middle East conflict: Consumer behaviour shifted after the conflict escalated. Confidence fell, average transaction values softened, and more households moved towards saving. The clearest impact was in major purchase intentions, travel and big-ticket retail, where consumers became more willing to wait.

Mixed category performance: Clothing & footwear saw mixed growth, with consumers’ willingness to spend constrained by dampened confidence. DIY & gardening and parts of the home market received a small boost from warmer weather. Electricals remained mixed, with performance under pressure from faltering confidence.

Macroeconomic backdrop

The domestic macroeconomic backdrop started the month from a strengthening position, with underlying conditions starting to improve slightly.

However, the surge in energy prices in response to the escalating conflict between the US and Iran means inflation is now expected to sit at between xx% and xx% over the next two quarters. Previously, a return to the target of 2% was expected from April.

The headline inflation rate increased to xx% in March, up from xx% in February, as the closure of the Straight of Hormuz shipping channel fed through into an xx% increase in fuel prices. 

As a result, the Bank of England held interest rates xx% in March instead of a previously anticipated cut. Policymakers are likely to wait to see whether higher energy costs translate into broader and more persistent inflation before any changes are made to Bank Rate.

With consumers’ remortgaging rates already being affected and with petrol prices surging, consumer confidence fell to an eleven-month low in April to xx, following March’s fall to xx.

Elsewhere, labour market conditions remained soft without deteriorating further, with unemployment hovering around xx. Earnings growth remains at a pace close to inflation, limiting any meaningful improvement in real incomes.

GDP grew xx% in February, its strongest monthly expansion since January 2024. The expansion means the economy entered the current period of uncertainty on a stronger footing, with the impact of the US-Iran war yet to be seen.  

The impact of the conflict and faltering consumer confidence will be seen in the coming months, with retailers also having to battle their own increased supply chain and transport costs caused by the issues impacting the Straight of Hormuz shipping channel.

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Real GDP grew by 0.5% in the three months to February 2026, following a growth of 0.3% in the three months to January 2026 and no growth in the three months to December 2025