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Shop sales fall as high inflation hits home

Retail sales fell for the first time in seven months in March as consumers reserved spending for essential items in light of rising inflation.

Data from the British Retail Consortium (BRC) and KPMG showed that like-for-like UK retail sales fell by 1% in March compared with a year earlier, while total sales dropped 0.2%, marking the first decline since August last year.

Paul Martin, UK head of retail at KPMG, said March proved to be a "disappointing end" to the first quarter for retailers. "Food sales remained in the black for a full quarter, although this is largely being driven by rising inflation, so no reason for too much celebration."

The biggest drag came from non-food retail sales, which fell 1.1% on a like-for-like basis and 0.8% in total terms in the three months to March. Like-for-like food sales in the three months to March decreased by 0.2%, but jumped 1.2% on a total basis.

BRC chief executive Helen Dickinson said: "Food sales continue to outperform non-food sales as shoppers focus their spending on essential items. This marginal growth in food was bolstered by slightly higher shop prices following increases in global food commodity costs and a weaker pound."

The pound has fallen by more than 17% against the US dollar and 10% against the euro since the Brexit referendum, increasing the cost of imports.

Mrs Dickinson added: "The pressure on prices continues to build, albeit slowly."

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