Retailers failed to bask in the glow of Team GB's Olympic success last month as the sector suffered its worst sales this year, figures have shown.
Retail sales values were down by 0.4% on a like-for-like basis last month, said the British Retail Consortium (BRC). This was the lowest since November last year (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 but the net effect of the Games was minimal as lower footfall in London hit sales, it said.
Stephen Robertson, director general of the BRC, which represents some 60% of retailers, said: "It's clear people were absorbed by the magnificent Olympics and had little interest in shopping, especially for major items."
The research will fuel fears over Britain's economic recovery as the country struggles to emerge from the longest double-dip recession since the 1950s. 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.
Mr Robertson added: "As summer gives way to the all-important Christmas run-up, retailers will be hoping sales that didn't happen in August have been postponed and not lost entirely."
The CBI has already released a weak survey for August, which showed that the balance of retailers reporting that sales were up year-on-year was minus 3% in August, the weakest level since last April.
Howard Archer, chief UK and European economist at IHS Global Insight said, said: "Reinforcing belief that consumer spending is likely to be limited in the near term at least, consumer confidence remains mired near record low levels, amid elevated concerns over the economy.
"Indeed, even the 'feelgood factor' arising from the successful Olympic Games failed to lift consumer confidence in August, which is somewhat worrying."
High Street casualties
Worst sales of year for retailers
Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.
Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.
The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.
Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.
Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.
La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.
Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.
Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.
Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.
Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.
The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.
Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.
Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.