March retail sales fail to meet projections

Retail sales showed a bigger fall than expected in March, according to the Office of National Statistics. Figures show that sales dipped by 0.4% over the month as concerns about the economy continued to grow.

Despite the drop for March, the figures also show that sales were 2% higher over the first three months of the year than the previous three months, the highest level since July 2006.

ONS says the sale growth was revised up in January from 1.1% to 1.5% and in February from 1% to 1.1%, suggesting that consumer spending is holding up despite the credit crunch.

Food sales dipped by just 0.1% on the previous month but were up 3% on the previous year despite the rising cost of ingredients leading to price increases on core products such as bread. Sales of textiles, clothing and footwear fell by 1.7% on the month and 0.1% on the year, its first annual drop since December.

The drop in sales comes just weeks after the British Retail Consortium said retails sales had declined in March, the first fall in almost two years.