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The Director General of the British Retail Consortium, Stephen Robertson has said that the Olympic period was "an unknown."
He added that "shoppers were more interested in watching the magnificent Olympics rather than getting out on to the high-street."
Mr Robertson also said that there was hope for Christmas as retailers prepare for the festive season; "let's cross our fingers that the good feelings we got out of the Olympics and the Paralympics carry on in to the fourth quarter of this year."
Howard Archer, chief UK and European economist at IHS Global Insight said that retail sales may have also been limited by people avoiding the shops in London during the Games over fears of excessive congestion on the transport system.
The British Retail Consortium said;
"The survey dilutes hopes that the holding of the Olympic Games has had a significant overall boost to the UK economy in the third quarter (although there will be a positive impact from the ticket sales) and it also underlines the fact that consumers are still facing very difficult times.
"On the positive side, the labour market is currently remarkably resilient with employment rising while consumer price inflation has halved from the September 2011 peak of 5.2%, but that is the main good news at the moment."
The British Retail Consortium research shows:
- The most notable impact from the Olympics was felt online, which saw growth of 4.8% in August, the lowest since the BRC started collecting data on internet sales in October 2008.
- Warmer weather in the middle of August helped boost sales of food, especially party snacks such as crisps, nuts and barbecue foods.
- Clothing had an "unusual and rather disappointing" month, the BRC said, as womenswear retailers failed to attract customers to autumn/winter ranges.
Retailers failed to bask in the glow of Team GB's Olympic success last month after figures showed the sector's worst sales this year.
Retail sales values were down by 0.4% on a like-for-like basis last month, the British Retail Consortium said, the lowest since November last year, when excluding April, which was heavily distorted by Easter timings.
The sporting event gave a mild boost to food sales in the form of party food and drink, the BRC said, but the net effect of the Games was minimal as lower footfall in London hit sales.
Stephen Robertson, director general of the BRC, which represents some 60% of retailers, said:
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