July retail sales: analysts respond

City analysts have taken the British Retail Consortium's latest announcement - which said last month's sales were the worst in July for 10 years - with a pinch of salt. Many cite customer traffic analysis for the month, which takes into account the spate of one-off events. These include the bombings in London and hot weather, which have affected sales, as well as the underlying consumer malaise.

Here are some analysts' comments:

Numis analyst Iain McDonald

'Amid all this gloom, the key is to focus on those retailers whose competitive position and product focus means that positive like-for-like growth is still a good possibility over the next 12 months. In this vein, we would highlight Carphone Warehouse, Halfords, The Body Shop and Majestic Wine.'

Investec analyst Matthew McEachran

'Sales data is slightly better than widely expected, given events. If housing transaction numbers recover on the back of the rate cut, some home-related categories should turn the corner in the early part of next year.'

Ernst & Young head of retail Tim Sleep

'The one crumb of comfort that retailers can take from July's performance is that the numbers were exaggerated by the impact of the bombings. Provided there are no further attacks, shopper numbers should return to normal relatively quickly.'

Seymour Pierce analyst Rhys Williams

'Although on the face of it the like-for-like figure is disappointing, taking into consideration that sales were impacted by the terrorist attacks across London, affecting all major conurbations, we believe it isn't too bad a figure. The BRC continues to push for a further rate cut and while it has a 50/50 chance of receiving one before the year end, we still wonder how much of a positive impact this will actually have on trade.'

Capital Economics UK economist Vicky Redwood

'Overall, the BRC survey suggests that June's rebound in official sales is likely to have been short-lived. While the August interest rate cut will lower mortgage interest payments and may boost confidence, a slowing housing market, the prospect of tax rises and rising debt principal payments should keep spending growth subdued.'

Evolution analyst Nick Bubb

'Although the [year-on-year] comparisons are getting weaker all the time - the BRC index for August last year was only up 0.6 per cent like for like - we still see scope for disappointment, with the expected autumn high street recovery, beginning with the key back-to-school period. We would still be wary of the weaker situations in the sector.'