Unpredictable weather combined with the housing market's woes last month to deepen the plight of retailers struggling with consumers' retreat from the high street, the British Retail Consortium reports this morning.

In further evidence of consumer demand wilting amid an intense squeeze on households' finances, the BRC says that the value of high street sales on a like-for-like basis fell last month by 0.9 per cent, from the level a year earlier. Like-for-like sales, which are adjusted for changes in retail floorspace, have now fallen in four of the past five months.

Total sales rose last month by only 1.7 per cent from levels at the same time a year earlier, compared with an average gain of 2.7 per cent in the first half of last year, emphasising the weakening trend in consumer confidence and spending.

Only the food and drink sector registered significant growth in sales during July, the BRC says, with trading for supermarkets flattered by comparison with last July, when it was hit by torrential rain.

Sales last month remained particularly poor for furniture, floorcovering and homeware stores as trading is undermined by the slump in the housing market. Sales of furniture, carpets and other floorcoverings have now fallen for six consecutive months, despite extensive discounting and promotions by retailers, the BRC reports.

Clothing and footwear retailers also felt the squeeze last month, with their sales dropping farther below last year's levels after a short-lived surge in May triggered by sunny weather. The BRC finds that clothes shoppers are increasingly concentrating on basic and essential items, although it also reported some strength in sales of upmarket, designer products.

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