Retailers were hit in March by a 3.9 percent drop in sales volume, marking the sector?s first year on year decline since August 2002.

Clothing retailers led the fall followed by a slump in new car sales, Government?s retail sales bulletin yesterday revealed. In contrast, building and hardware retailers experienced their third month of double digit growth.

In total, consumers paid out $52.9 million to local shopkeepers in March ? 1.3 percent less than the $53.6 million spent during the same period a year earlier. After adjustment for inflation, retailers were effectively left short by 3.9 percent. This was the first decline since sales fell by 1.7 percent before inflation nearly four years ago.

To add to retailers? woes, consumers spent nine percent more overseas in March than a year earlier, according to H.M. Customs? data included in the bulletin. Residents returning to the Island declared purchases of $3.9 million, a $300,000 jump on the same period a year earlier.

The surge in overseas sales was likely fuelled by less choice in the clothing sector, with apparel sales slumping over the last nine months on the heels of two major retailers shutting down.

Customs data incorporated into the monthly Retail Sales Index omit online and mail order purchases, meaning the full extent of overseas sales was likely higher than recorded.

Clothing sales in March fell 26.4 percent year on year, extending a negative pattern set since last July when landmark Front Street department stores Trimingham Brothers Ltd. and H.A.& E. Smith?s closed. In the last nine months, sales for the sector have been down in the double digits, as follows: August (-22.5%); September (-26.1%); October (-33.4%); November (-26.4%); December (-19.3%); January (-28.5%); and February (-21.6%).

Vehicle sales ? an area where shoppers have been dropping cash over the last year? also fell short in March. Sales fell 3.3 percent after rising 46 percent in the month prior.

The decline ended 13 months of strong motor vehicle sales, with an average sales gain each month of 25.8 percent, the RSI bulletin said. The drop was attributed to lower stock levels and less demand for showroom models.

Also suffering lower sales was the service station sector. Sales were 1.2 percent lower in March, likely the result of a number of garages closing in the last year for major renovations.

All other retail sectors saw a rise in consumer spending during March.

The sale of building materials was buoyant, up 12.3 percent over March 2005, continuing three months of double digit growth. And gross receipts taken in by grocers were five percent higher than a year earlier, partly the result of food prices rising 2.7 percent in the last year.Liquor sales advanced a marginal 0.7 percent.