by business editor Trevor Sturgess

Hopes of an early economic recovery may be premature after a dip in high street sales.

According to the British Retail Consortium - KPMG Retail Sales Monitor covering August 2 - 29, UK retail sales values fell 0.1 per cent from the August 2008 figure when sales were badly hit by wet weather.

Simon Russell, managing director of John Lewis Bluewater, said sales in August were down around four per cent, but that was partly due to store refurbishment.

The weather had been good in August and that always affected Bluewater sales. There was evidence things were improving but it was “still tough".

"Our sales relative to last year have shown a distinct improvement," he said. "As a business, we’re expecting that things will be slightly better in the second half but not fantastic.

"There seems to be a loosening of the purse-strings for some of the bigger purchases. There is a little evidence that people are starting to invest again."

Nationally, according to the British Retail Consortium figures, food sales continued to do better than non-food, edging up from July’s low. Clothing and footwear weakened further. Homewares and furniture sales fell back.

But internet, mail order and telephone sales grew by 7.9 per cent, although this was the weakest increase since May, and the second weakest in the past 11 months.

Stephen Robertson, director general of the British Retail Consortium, said: "The stronger figures of June and July haven’t been sustained. It’s clear the deceptively good sales growth of those months was due to summer sun and price cuts – not any major revival in how customers are feeling. What spending we now have is all about value and essentials.

"In August, food sales continued to do better than non-food. After two months of growth, clothing and footwear are well down. People are holding off buying autumn and winter clothing till they actually need it.

"Most people are still very reluctant to spend on expensive household items – unless they’re sufficiently discounted. As we head into autumn, we mustn’t make too much of any positive sales growth because the comparison will be with very weak figures a year ago when total sales growth dipped below zero."