The boss of fashion chain Next today said it had been hit by a generational shift away from owning ever more “stuff” to spending on memorable experiences such as eating out with friends.

Chief executive Lord Wolfson, who was unveiling the retailer’s first fall in profits for eight years, said the trend — most closely associated with young “Millennial” shoppers — was a major reason why he remained “extremely cautious” about the outlook for the rest of 2017.

In a statement to shareholders Lord Wolfson said latest consumer spending data “shows the growth in spending in pubs, restaurants and entertainment compared to High Street clothing in the fourth quarter of 2016.

“We believe that these numbers demonstrate the continuing trend towards spending on experiences away from ‘things’,” — although he added that he expected the switch not to be permanent.

Lord Wolfson pointed to latest figures from Barclaycard revealing that expenditure in restaurants shot up 11 per cent in the last three months of 2016 compared with the previous year, while pubs saw 10 per cent more takings, and entertainment, such as going to the cinema, saw an eight per cent rise.

Over the same period spending on dresses, shirts, trousers and other clothing items dipped 0.3 per cent.

Lord Wolfson is the latest retail chief to highlight the challenge facing his industry in the age of the “experience economy”, when adventures that can be shared on social media are valued over ownership of shop-bought products.

Last year Ikea executive Steve Howard warned that consumers’ obsession with owning goods was on the wane, saying: “In the West we have probably hit peak stuff.”

Lord Wolfson — a leading business advocate of Brexit — also flagged up rising inflation following the devaluation of sterling after the referendum as another tough “headwind” buffeting the business.

A third challenge was falling real wages biting into consumers’ spending power, he added.

Official figures showed a bounce-back in high-street spending in February after two alarmingly weak months, although analysts said the underlying trend was still gloomy as households start to tighten their belts. Retail sales were up by 3.7 per cent compared with February last year and 1.4 per cent against January this year.

Next’s pre-tax profits for the year to 28 January were down 3.8 per cent to £790.2 million. Sales from the high-street shops dropped 2.9 per cent to £2.3 billion, while online and catalogue sales rose 4.2 per cent to £1.73 billion. However, Next’s share price rose nine per cent, or 310p to 4195p, on relief that the figures were not even worse.