Turnover figures from the Australian Bureau of Statistics shows sales nationally in July slumped 2.7 per cent compared to the prior month, as a result of extensive lockdowns in Greater Sydney.

July's fall is the largest on record this year and compared to one year ago, aggregate turnover is 3.1 per cent lower.

The sharp decline in July sets up for further anticipated impacts in August, where lockdowns were imposed in all of NSW, Victoria and the ACT.

ANZ Economics were expecting retail sales to fall by 4 per cent.

Hospitality, clothing and department store retailing incurred large falls of more than 11 per cent, while essential food services rose 2.3 per cent over the period.

Turnover in NSW fell 8.9 per cent, while ACT's figures rose 2.1 per cent.

ACT's rise is before lockdown measures were implemented in the territory.

Economists at Barclays said the impact will be more pronounced in coming months.

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"August sales are likely to be worse, as the impact from the NSW lockdown will be exacerbated by a much longer period of restrictions in Victoria and the Australian Capital Territory," analysts at the UK banking group said.

"However, once the restrictions are eased (September), we expect a jump in retail sales, similar to the trend seen after Victoria reopened in October-November 2020."

Australian Retailers Association chief executive Paul Zahra said lockdowns will have a bigger impact on small businesses.

He noted more support is needed to assist businesses financially bruised by the effects of lockdowns.

"Businesses have been left reeling from the Delta devastation and today's figures confirm the severity of the lockdowns and the impacts they have on retail spending," Mr Zahra said.

"Consumer and business confidence has been shattered by the recent outbreaks in multiple states, and the state and federal supports just haven't been enough to save a number of businesses from closing their doors permanently."