The Retail Sales Index (RSI) for August saw another drop in retail sales volume after adjusting for inflation - despite more than a 30 percent surge on last year's figure by the motor industry.

Retailers' fears were confirmed as spending on apparel and clothing accessories dropped 7.6 percent with more than 70 percent of stores in this sector reporting sales receipts below the previous year's levels.

Retailers in all other sectors reported mixed performances as gross revenue flows slipped 3.8 percent below the level reached last August.

Many outlets reported a downturn in sales activity, with the largest declines experienced by those businesses catering to visitors.

Additionally, sales of home appliances, electronic equipment and marine supplies all fell below last year's levels, although consumer spending on furniture and home furnishings increased moderately year over year.

The monthly index for the total value of retail sales stood at 128.0 index points for the month of August, recording a 2.7 percent increase in sales over the same month last year.

However, when adjusted for inflation (2.8 percent) the total volume of retail sales fell fractionally by 0.1 percent.

Gross turnover in the retail sector was estimated at $42.4 million for the month.

The motor vehicle sector reported the strongest gain in sales revenue with aggregate receipts surging 30.9 percent year over year.

Auto dealers attributed the rise in vehicle sales to higher inventory levels, which reflects average sales activity.

For the same month last year, dealers experienced low levels of inventory, which resulted in sub-par sales performances.

Service stations seem to have benefited from the upsurge in automobile purchases as there was a 3.1 percent rise in petrol sales.

Gross receipts for hardware and building supplies increased 6.3 percent year over year.

Liqour merchants reported a 4.1 percent increase in sales receipts and gross receipts for food stores increased 2.6 percent for the month.

Residents returning to the Island from overseas vacation and business trips declared purchases of goods valued at $3.38 million. This was 8.9 percent lower than last August's $4.26 million of declared goods.

The decline may be attributable to fewer residents travelling in August this year - 17,827 compared to 18,219 last year.

Next month's RSI report will start to show the economic effects on Bermuda in the wake of the September 11 attacks on the US