The British Retail Consortium (BRC) has declared hopes of a recovery in the retail market “premature”, with lower food price inflation undermining improved sales in previously months.

UK retail sales value fell 0.1 per cent on a like-for-like basis from August 2008 as a result of wet weather, while sales on a total basis rose 2.2 per cent against a 1.4 per cent increase in August 2008.

Food sales growth was slightly stronger than in July, although increasingly dampened by lower food price inflation, particularly for fresh fruit and vegetables.

Sales varied with the weather, with sunny days driving the sale of barbecue foods and prepared salads, while cooler wet weather led to a shift to soups, roasts and home baking. Shoppers continued to look for value lines and promotions, but some also noted signs of trading up and treating.

This is the first month overall shop prices have fallen compared to the previous year since February 2007, while overall annual shop price deflation was 0.1 per cent in August, compared with inflation of 0.5 per cent in July.

Food price inflation was 2.3 per cent in August compared with 3.8 per cent in July.

BRC director general Stephen Robertson said: "The stronger figures of June and July haven't been sustained. It's clear that 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.

"Most people are still very reluctant to spend on expensive household items - unless they are sufficiently discounted. As we head into autumn, we must not 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."

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