Wet weather washed out hopes of a summer spending boom on the high street in August as sales rose at their slowest rate for eight months, a survey showed today.

Retailers were forced to slash prices of summer clothing in order to shift stock as the rain dampened demand in every sector, the study by the British Retail Consortium (BRC) and accountants KPMG revealed.

Stores were not helped by the August bank holiday falling a week later in 2004 compared with 12 months ago, which depressed year-on-year comparisons.

On a like-for-like basis, sales expanded by 0.6% in August against 1.7% during the previous month, the survey showed.

The BRC said wet weather was a major factor in the worst sales performance since December, but it also masked an underlying trend of weak consumer confidence.

BRC director general Kevin Hawkins said: "These figures should sound warning bells...that the consumer economy is increasingly fragile in the crucial run-up to Christmas and cannot sustain another rise in interest rates."

A CBI survey last week reported a sharp slowdown in sales with demand for groceries sliding at its fastest rate in 21 years. This followed a poll by research firm GfK Martin Hamblin which showed consumer confidence falling during August.

Acting head of retail at KPMG, Helen Dickinson, said homewares and furniture fared particularly badly during August. "It does not bode well for the rest of the year," she added.

Tuesday September 07, 2004