In a welcome shift for the UK’s high streets and shopping centres, the latest figures from the Office for National Statistics (ONS) reveal a third consecutive month of growth in retail sales, sparking renewed optimism across the industry. With a 0.4% month-on-month rise in March 2025 and a 1.6% boost across the first quarter, retailers may finally be stepping out of the shadow of prolonged consumer caution and economic turbulence.
While the overall narrative is positive, the composition of this growth tells a more nuanced story. Non-food retailers—especially those in clothing, department, and outdoor leisure categories—saw the biggest uptick, largely driven by improved weather and the first signs of spring consumer confidence. On the other hand, food retail, traditionally more resilient, saw a 1.3% decline, suggesting that rising grocery prices and continued pressure on household budgets may still be reshaping shopping behaviour.
A Real Turning Point or Seasonal Relief?
Analysts are cautious about declaring a full recovery. While three months of rising sales is encouraging, many point out that these volumes are still below their pre-pandemic averages. Moreover, with energy prices remaining high and interest rates still biting into disposable income, this rebound may owe more to temporary factors—like seasonal fashion spending and better weather—than structural change in the consumer psyche.
However, what is different now is the shift in consumer intent. According to retail insiders we’ve spoken to, customers are starting to re-engage with bricks-and-mortar stores not only for essentials, but also for discretionary purchases. This could indicate a long-awaited return of consumer confidence.
Digital and Physical Retail Alignment
What’s particularly striking about this current growth phase is the alignment between online and offline retail. Online sales have stabilised at around 26.4% of total retail spend—well above pre-2020 levels but down from the pandemic highs. This hybrid model, where customers blend online research with in-store purchases, is becoming the norm rather than the exception.
Retailers that have invested in seamless omnichannel experiences—offering everything from in-store pickups to live online consultations—are emerging as the frontrunners. It is here that UK retailers are starting to see return on their digital infrastructure investments.
Implications for Supermarkets and FMCG Brands
For food and grocery retailers, the picture is more complex. The drop in supermarket sales is a warning sign: consumers are still looking for value and may be turning to discount formats, meal planning, and alternative sources. Supermarkets must therefore innovate not just in pricing, but in product curation and customer engagement.
Brands that understand this shift—and work closely with retailers on promotions, formats, and sustainable packaging—stand to gain market share. Additionally, those able to supply reliably at scale may benefit as British grocers shift further away from complex, import-heavy supply chains.
Looking Ahead
With May figures due from the ONS in late June, the next few weeks will be critical in determining whether the UK retail sector is truly on the road to recovery. While it’s far too early for triumphalism, the current data is encouraging and may well mark the beginning of a more stable, resilient retail landscape.
Retailers, brands, and supply chain players alike would do well to treat this as a signal—not a guarantee—of better days ahead.
Riad Beladi is Editor at International Supermarket News and a veteran market analyst specialising in European retail and consumer trends.
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