Total retail sales in discretionary categories, including fashion, homewares and lifestyle, remained flat, rising just +0.8% year-on-year in March, representing a fall in sales volumes when taking inflation into account, says BDO’s latest High Street Sales Tracker.

Sales last month started positively, with the first two weeks recording above inflation growth across the High Street and digital channels, it data showed. However, the start of the Middle East conflict signalled an immediate decline, with the fourth and fifth weeks of March recording falls in sales of -3.04% and -7.74% respectively year-on-year. 

“After a dismal few months, March started with a ray of hope for retailers,” said Sophie Michael, Head of Retail and Wholesale at BDO.

“Above-inflation sales growth on the High Street for the first two weeks suggested green shoots of recovery with Mother’s Day giving retailers a boost. But this was a month of two halves, and those hopes were quashed in the final two weeks.”

BDO suggests that current consumer confidence has fallen to its lowest level since April 2025 amid warnings food and fuel prices will soar by the end of the year owing to tensions in the Middle East. 

“As the conflict continues, pressures are mounting with increased costs for fuel, energy and food. With consumers also facing rising mortgage rates and council tax bills, there is nervousness around discretionary spend,” Michael added.

She went on to say that in addition to economic headwinds and an already challenging trading environment, rising labour costs, shaky consumer confidence and falling discretionary spending propensity would continue to add further challenges for retail businesses.

“These factors create a perfect storm, adding further pressure on sales, margins and investment across the sector,” she concluded.