Olympics blamed for sales decline

Retailers claim consumers preferred to stay in and watch television rather than shop over the summer

Russell Lynch

Gloomy figures outlining the Olympic sales slump crushing the high street will emerge this week as retailers count the cost of shoppers engrossed by Team GB's record medal haul.

Official numbers for August are likely to reveal an outright fall in retail sales volumes after slowing to a crawl in July, economists warn. The figures follow disappointing snapshots from the Confederation of British Industry and the British Retail Consortium for the month, and downbeat updates from the likes of fashion chain Next.

The BRC reported its worst month for sales this year due to a slump in non-food purchases, partly a result of many shoppers staying away from London high streets due to concerns over potential transport chaos. Usually resilient online sales also managed growth of just 4.8 per cent, the worst since the BRC began collecting data four years ago.

The CBI also fuelled worries over the health of the high street as retailers reported flat sales and braced themselves for a difficult autumn. Next, the UK's second-biggest retailer, added that sales had been "disappointing" in August and early September. John Lewis partnership was more upbeat when it reported half-year figures last week.

Investec's chief economist, Philip Shaw, who is pencilling in a 0.7 per cent slide in sales, said: "Next's comments on the outlook were worrying in that it said August and September were pretty quiet.

"You can blame the Olympic effect but once you get past that you have to blame something else. What this number won't tell us is whether it is down to the Games or whether there is potentially something more fundamental in play."

The difficult conditions for retailers are likely to have prompted further discounts during the month, feeding into another fall in the Bank of England's Consumer Prices Index benchmark. Analysts expect the CPI to edge down from 2.6 per cent to 2.5 per cent on the month – despite petrol prices heading back towards record levels – as the contrast with rising gas and electricity bills a year earlier flatters the figures.

An ING economist, James Knightley, who forecasts a steeper fall in the CPI to 2.4 per cent, said: "The return of higher petrol prices is not good news for retailers when consumers are already under such pressure."

The latest jobs figures underlined the extent of the wage pain still hitting British households, with average salaries growing by just 1.5 per cent in the year to July – effectively a real-terms pay cut as they trail more than one percentage point behind the cost of living.

The lingering squeeze on consumer wallets and faltering recovery in household spending is almost certain to force the Government's fiscal watchdog, the Office for Budget Responsibility, into a downgrade of its current 0.8 per cent growth forecast this year.

Start your day with The Independent, sign up for daily news emails
News
i100
News
Bobbi Kristina Brown, daughter of the late singer Whitney Houston, poses at the premiere of
people
News
people
News
The frequency with which we lie and our ability to get away with it both increase to young adulthood then decline with age, possibly because of changes that occur in the brain
scienceRoger Dobson knows the true story, from Pinocchio to Pollard
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Life and Style
health
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen