UK retail sales in March dropped for the first time since August last year, declining by 1% on a like-for-like basis relative to March 2016, according to the latest figures from the British Retail Consortium (BRC).
The year before, British retail sales had only slumped 0.7% relative to 2015.
But the BRC said total sales, which were down 2%, were negatively distorted by the late timing of the Easter holiday.
The main takeaway from the March data was the growing gap between food-based retail sales and non-food retail sales.
On a total basis, food sales grew by 1.2% over the three months to March, whereas non-food retail sales slumped by 0.8% on a total basis.
Part of the reason for the widening sales gap between food and non-food products is inflation-related, said Nicla Di Palma, equity analyst at Brewin Dolphin.
“I very much doubt that people are going out and buying that much more food,” she said.
“Also, there is an obvious element of population growth and they have to eat something.”
Although food sales were not as high as they have been recently – it was the first time in four months the three-month total average sunk below the 2% mark – the discrepancy between food and non-food similarly reinforces consumers’ growing preference for experiences over material goods.
“Restaurants and pubs are doing pretty well, while the data shows consumers are less inclined to buy clothing these days,” said Mark Photiades, director of general retail equity research at Cantor Fitzgerald.
“Depending on who you speak to, some people think this is a structural or cyclical problem.”
He also thinks this is partly explained by a generational shift.
