UK retail sales slowed in March as consumer demand remained weak and rising costs linked to Middle East tensions began to affect supply chains. New data from the British Retail Consortium (BRC) points to subdued growth across the sector, with retailers facing a mix of cautious spending and external cost pressures.
The BRC described trading conditions as a “mediocre March”, reflecting ongoing pressure on household budgets and growing uncertainty linked to global events. The latest UK retail sales data suggests the sector continues to operate below historical growth levels.
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Consumer spending remains weak
Consumer spending in the UK retail sector showed little momentum during March. Households remained focused on essential goods, limiting demand for discretionary products.
Retailers reported that shoppers are becoming more price conscious. One industry expert noted that “shoppers are increasingly conscious of the amount of money they are spending at the checkout”, pointing to a shift in buying habits.
This trend has weighed on non-food retail sales in particular, where demand is more sensitive to economic conditions. While seasonal events may provide short-term support, underlying consumer confidence remains fragile.
Middle East tensions impact supply chains
Rising geopolitical tensions in the Middle East are beginning to feed through to retail supply chains. Industry data indicates that increased transport and input costs are adding pressure across the sector.
According to the BRC, “higher costs resulting from the conflict in the Middle East are starting to feed into supply chains”. These cost increases are expected to push up prices in the coming months, affecting both retailers and consumers.
Early signs of this trend are visible in shop price data, with inflation edging higher in March. While current levels remain below previous peaks, the upward movement signals a shift after a period of relative stability.
The BRC noted there are “no indications it will reach the peaks of the last spike”, but warned that continued disruption could sustain cost pressures.
Cost pressures and policy concerns grow
Retailers are also dealing with broader cost challenges beyond geopolitics. Energy costs, regulatory changes and labour-related expenses continue to shape the operating environment.
Industry representatives have urged policymakers to consider the cumulative effect of these pressures. One comment stressed that “government needs to look at all the costs that could exacerbate these price rises”.
There are concerns that rising costs could “take the edge off retail growth” in the months ahead, particularly if inflation strengthens further.
The March figures highlight the fragile outlook for UK retail sales. Weak consumer demand and global supply risks are converging, with Middle East tensions now a key factor influencing costs, pricing and sector performance.
