September 20, 2012 / 9:47 AM / 7 years ago

Retail sales dip in Aug as Britons watch Olympics

LONDON (Reuters) - British retail sales ticked down in August driven by a slump in online sales as Britons watched the Olympics on television, data showed on Thursday.

Sales volumes including automotive fuel dipped 0.2 percent last month, giving an annual rise of 2.7 percent, the Office for National Statistics said. Economists had forecast a drop of 0.4 percent on the month and an annual rise of 2.7 percent.

Volumes were 0.3 percent lower on the month when excluding sales of fuel.

Non-store retail volumes fell 6.7 percent compared to July — the sharpest decline since December 2007.

“Feedback from online retailers suggests that sales were lower as consumers watched the Olympics instead of shopping online,” the ONS said.

However, retailers of sporting goods and toys reported a boost from sales of soccer shirts and other items as a result of the new soccer season, the European Championship and the Olympics.

Between June and August, all retail sales rose by 0.6 percent compared to the previous three months, a slight slowdown from the 0.7 percent increase in the three months through July.

Britons have been cutting back on non-essential spending as their incomes are suffering the worst squeeze for more than 30 years on the back of soaring food and fuel prices, higher taxes and slow wage rises.

Earlier surveys had indicated that many retailers were disappointed with business during the London Olympics, which took place during the first two weeks of August.

The ONS said retail prices rose by 0.2 percent on the year in August, matching July’s two-and-a-half-year low.

While easing inflation and falling unemployment should relieve the pressure on Britons’ incomes and support consumer confidence, a meaningful recovery looks still some way off.

However, some big retail chains such as department stores John Lewis and Debenhams and electronics retailer Dixons have reported solid sales growth.

The Bank of England’s regional offices noted in their monthly survey published on Wednesday that special offers were still key for retailers to lure customers looking for value for money, with discount retailers gaining market share from mid-range ones.

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