British retail sales rose 0.7% in March, defying forecasts of a 0.1% decline, as motorists stocked up on fuel amid sharply rising prices linked to the Iran war, according to the Office for National Statistics.
The surge in fuel purchases drove the overall increase, with petrol and diesel sales volumes jumping 6.1% — the highest level since April 2021 — while spending on fuel rose 11.6% due to price spikes at the pump.
Excluding fuel, retail sales still grew 0.2% month-on-month, recovering from a 0.6% fall in February, which the ONS later revised down from an initial estimate of a 0.4% decline.
Clothing and footwear stores benefited from sunnier weather, reporting a 1.2% increase in sales, while department stores saw a 1.1% rise, and technology retailers gained from new product launches.
Supermarkets and food stores were the only sector to decline, with sales volumes falling 0.8% as consumers shifted spending toward fuel and discretionary goods.
For the first quarter of 2026, retail sales volumes are up 1.6%, supported by growth in January and the March rebound.
Hannah Finselbach, senior statistician at the ONS, noted that commercial art galleries and beauty product stores performed well earlier in the quarter, with retailers launching new collections to drive demand.
Deann Evans, managing director for Europe at Shopify, said the rebound indicates that while consumer confidence remains under pressure, spending has not stalled and shoppers continue to engage when purchases feel timely and relevant.
What the fuel-driven surge reveals about consumer behaviour
The sharp rise in fuel buying reflects a defensive spending pattern, where consumers prioritise essentials amid geopolitical uncertainty, even as they cut back on groceries.
This behaviour suggests households are reacting to external shocks by securing perceived necessities first, a trend that may persist if Middle East tensions continue to affect energy markets.
How contrasting sector performances split the retail landscape
While discretionary sectors like clothing and technology gained from seasonal factors and innovation, food retailers faced headwinds as budgets were redirected toward fuel.
The divergence underscores how macroeconomic shocks can create uneven impacts across industries, benefiting some while pressuring others within the same month.
Why did retail sales rise despite expectations of a decline?
Retail sales rose given that motorists increased fuel purchases in response to rapidly escalating petrol and diesel prices triggered by the Iran war, which more than offset weaknesses in other sectors.
Which parts of the retail sector struggled during the March rebound?
Supermarkets and food stores saw sales volumes fall by 0.8%, making them the only retail sector to decline as consumers shifted spending toward fuel and away from groceries.