Motorists stocking up on fuel helped to push up retail sales in Great Britain last month as the Iran war prompted \u201cpanic at the pumps\u201d amid rapid rises in petrol and diesel prices.<\/p>\n
The Office for National Statistics (ONS) said that the volume of retail sales rose by 0.7% last month, well above analysts\u2019 forecasts of just 0.1%.<\/p>\n
Fuel sales volumes surged by 6.1% last month as motorists filled up their tanks while the conflict in the Middle East triggered the biggest jump in fuel prices for more than three years.<\/a><\/p>\n The value of sales for fuel \u2013 the amount of money spent \u2013 was up by 11.6% amid the jump in petrol and diesel prices, the biggest monthly increase since November 2021.<\/p>\n \u201cThere was panic at the pumps in March, as escalating prices saw motorists race to fill up their tanks to try to save cash and build reserves in case of shortages,\u201d said Susannah Streeter, chief investment strategist at Wealth Club.<\/p>\n \u201cA surge in purchases on forecourts was the biggest driver behind the uplift in monthly retail sales.\u201d<\/p>\n Just before the US-Israeli attacks on Iran began at the end of February, the price of oil was hovering at $72.50 a barrel.<\/a><\/p>\n The conflict has shut the strait of Hormuz \u2013 a key shipping route in which about one-fifth of the world\u2019s oil and liquefied gas passes through during peacetime. The closure fuelled highs of $119.50 a barrel<\/a> on the futures market in early March, and to record highs of almost $150 a barrel for physical cargoes<\/a>. On Friday, Brent crude rose by 1.3% to $106 a barrel.<\/p>\n Earlier this week, Donald Trump indefinitely extended a ceasefire with Iran<\/a>, but attempts to negotiate an end to hostilities and reopen the strait have failed.<\/p>\n Excluding the impact of fuel buying, total retail sales rose in Great Britain by 0.2% month-on-month, bouncing back from a 0.6% fall in February. On Friday, the ONS revised down February sales from the 0.4% decline it estimated last month.<\/p>\n The ONS said that sunnier weather in March helped retailers, in particular clothing stores. Textile, clothing and footwear stores reported a 1.2% month-on-month sales increase, while department stores recorded a 1.1% sales rise.<\/p>\n The only retail sector to record a month-on-month decline in sales was supermarkets and food stores, which reported a 0.8% fall in the volume of sales.<\/p>\n Deann Evans, managing director for Europe at Shopify, said: \u201cThis rebound suggests that while consumer confidence remains under scrutiny, spending has not stalled in tandem, and shoppers remain willing to engage where purchases feel timely and relevant.\u201d<\/p>\n Investec economist Ellie Henderson said that the increase in volumes excluding fuel suggested that \u201cconsumers opted to scale back saving to fund the extra spending on fuel rather than scale back other purchases\u201d.<\/p>\n Despite the sales boost in March the ongoing impact of the Iran war on the economy is taking its toll on consumer confidence.<\/p>\n On Thursday, data provider GfK\u2019s consumer confidence barometer fell by four points to -25 in April, the biggest drop in a year<\/a>. That is the lowest level since 2023, indicating that the disruption and high energy prices caused by the Iran war is alarming consumers.<\/p>\n The closely watched S&P Global purchasing managers\u2019 index showed UK service sector firms hit with the biggest jump in costs since 1996 between March and April<\/a>.<\/p>\n Separately, earlier this week the ONS said that more than a quarter of firms in its weekly survey of business conditions expected the price of goods or services they sell to increase next month<\/a>, the highest since January 2023.<\/p>\n \u201cLooking ahead to the rest of 2026, there are already signs that consumer confidence is taking a hit,\u201d said Jacqueline Windsor, head of retail at PwC UK. \u201cIf consumers are forced to spend more on grocery, petrol and utility bills, they will inevitably be forced to rein back their discretionary spending.<\/p>\n \u201cSo, for most retailers, the first few months of this year are likely to be remembered as the calm before the storm.\u201d<\/p>\n