It was the second decline in year-over-year growth since August 2011, but it follows a strong gain of 2.5 percent in February, ONS said. It was also roughly in line with expectations.
Economists had predicted a drop of 0.6 percent.
From February, sales slipped 0.7 percent. Analysts had expected a month-to-month decline of 0.8 percent.
The ONS said March was the second coldest in Britain on record, "and this appears to have had a negative effect on sales in the non-food sector," the agency said.
For the month, sales value or the amount spent rose 0.1 percent over March 2012 with the strongest gains coming from food sales and non-store retailers, which means Internet and catalog sales.
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