Retailers have seemingly shrugged off concerns over April’s tax rises and are committing to opening more shops in the first quarter of the year, signaling renewed confidence in the high street.
According to the property data analytics company CoStar, about under 7 million sq ft of retail space was leased across the UK between January and March, the highest level seen since the pandemic began.
The figure represents an 8 per cent increase on the previous quarter and a 25 per cent rise on the same period a year ago, marking the strongest retail leasing activity for six years.
The figures suggest that retailers are starting to become more confident to invest in physical space despite mounting cost pressures.
The data offers an upbeat counterpart to widespread concern among retail businesses about the impact of April’s tax changes, including national insurance rises for employers and increases to the minimum wage announced in the budget in October.
Mark Stansfield, senior director of UK market analytics at CoStar, said that although retail recovery remained fragile and some retailers would struggle with increasing national insurance contributions and minimum wage rises, the increased retail take-up reflected a broader recovery in consumer behaviour.
He pointed to recent data that showed that retail sales growth exceeded expectations in February and consumer confidence rose by a point to minus 19 in March, helped by rising real wages, according to the consultancy GfK. Consumer confidence remains in negative territory, however, and below the long-term average.
BRC's March data shows an uptick in retail sales with food sales increasing by 1.6 per cent year on year in March, against a growth of 8.3 per cent in March 2024.
Helen Dickinson, Chief Executive of the British Retail Consortium, said, “Despite a challenging global geopolitical landscape, the small increase in both food and non-food sales masked signs of underlying strengthening of demand given March 2025’s comparison with last year’s early Easter.
"The improving weather made for a particularly strong final week, with gardening and DIY equipment flying off the shelves.
