'This heralds bad news for the sector': Retail sales rebound as motorists stock up on fuel
UK retail sales returned to growth last month as motorists stocked up on fuel due to price increases caused by the Iran war, according to official figures.
The Office for National Statistics (ONS) said the total volume of retail sales, which measures the quantity bought, rose by 0.7 per cent in March. This compared with a 0.6 per cent fall in February, which was revised slightly lower. The latest reading was also stronger than expected, with economists having predicted a 0.1 per cent dip for the month.
Statisticians said March’s increase was particularly driven by a spike in demand for fuel, which saw sales volumes jump by 6.1 per cent for the month, the highest level since April 2021.
They indicated that this was linked to a short period, of less than a week, of particularly elevated sales as unfolding geopolitical events in the Middle East caused a significant rise in prices at the pump.
The value of sales, the amount of money spent, for fuel was up 11.6 per cent amid the jump in petrol and diesel prices.
Recent data from the RAC shows that petrol prices have risen by 18.5 per cent to 157.34 pence per litre, as recorded on Wednesday. Meanwhile, diesel is up 33.4 per cent to an average of 189.88 pence per litre.
Elsewhere, clothing stores also had a strong month, with sales volumes across the category rising by 1.2 per cent in March amid a boost from better weather conditions.
Technology retailers also saw sales grow after they benefited from new products launches. However, food sales were weaker, slipping by 0.8 per cent for the month. The ONS said overall retail sales volumes are up 1.6 per cent for the first three months of 2026, as the industry was also supported by positive growth in January.
ONS senior statistician Hannah Finselbach said: “Retail sales rose in the three months to March, with commercial art galleries doing well earlier in the quarter and sales in beauty products stores rising as retailers reported launching new collections.
“Motor fuel sales were up on the quarter, with retailers commenting that many motorists had been filling up their tanks in March following the start of conflict in the Middle East.”
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: “The first batch of hard data on consumers’ spending since the start of the Iran war was better than expected.
“Granted, stocking up on motor fuels drove headline sales higher, but even excluding petrol retail sales volumes nudged up showing that households largely brushed off the initial shock of higher energy prices.”
Danni Hewson, AJ Bell head of financial analysis, said: “The jump in retail sales in March actually heralds bad news for the sector, as consumers rushed to fill up their vehicles amid rising petrol and diesel prices.
“Not only was the increased price of a tank eating into household budgets, but some motorists were bringing forward this purchase. There have been concerns about rising prices and potential shortages as a result of the war in the Middle East which have so far not materialised.
"People can only spend a pound once and if they’re choosing to shell out more than normal on fuel, they’ll have less to spend on other purchases."