Warm weather and Mother’s Day offer boost to retailers amid ‘challenging’ landscape

Food sales increased by 1.6 per cent year on year, against a growth of 8.3 per cent in the same period last year, while non-food sales increased by 0.6 per cent, compared to a decline of 0.4 per cent last year.

The figures come as businesses this month face increased National Insurance contributions and a higher National Living Wage, first announced in last year’s budget.

Helen Dickinson, chief executive of the British Retail Consortium, said: “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.

“The improving weather made for a particularly strong final week, with gardening and DIY equipment flying off the shelves. Jewellery and beauty products were helped by Mother’s Day, though sales of bigger ticket items like furniture remained weak.

“Since the start of April, retailers have had to contend with £5bn of new government-imposed costs as a result of increases to the National Living Wage and National Insurance. This rises to £7bn 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.”

The Government has argued that increases to National Insurance will help pay for critical services including the NHS.

In-store non-food sales decreased by 0.1 per cent year on year in March, according to KPMG’s latest report. This compared to a growth of 0.1 per cent in March 2024.

Online Non-Food sales increased by 1.8 per cent year on year against a decline of 1.4 per cent in March last year.

The online penetration rate – the proportion of Non-Food items bought online – increased to 37.1 per cent from 36.6 per cent in March 2024.

Linda Ellett, UK head of consumer, retail & leisure, at KPMG, said: “As Spring weather 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. But with non-food sales only climbing around one 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.”

The figures come as the latest Barclays Consumer Spend report also showed that consumer card spending grew just 0.5 per cent year-on-year in March – lower than February’s 1.0 per cent growth and less than the latest CPIH inflation rate of 3.7 per cent.

Confidence in discretionary spending remained resilient, with 58 per cent confident in their ability to spend on non-essential items, according to Barclays. Essential spending, however, contracted 2.9 per cent, with consumers making cutbacks in anticipation of rising household bills.