Retail sales growth “slowed in July from June”, with like-for-likes rising just 0.9 per cent in the four weeks to July 29, compared to 1.1 per cent growth a year prior.
New figures from the BRC-KPMG Retail Sales Monitor have revealed that total sales in July rose 1.4 per cent, slowing from growth of 1.9 per cent in the same month last year.
The latest figures were largely driven by food spend, which saw 2.3 per cent like-for-like growth and 3.4 per cent total growth over the three months to July, stronger than the same period in 2016.
“Closer inspection of the headlines however unveils some familiar challenges,” British Retail Consortium (BRC) chief executive Helen Dickinson said.
“The month’s growth was underpinned by food sales alone, while non-food sales relapsed into negative territory as the competition heats up over a shrinking pool of discretionary consumer spending power.
“Against a backdrop of increased consumer borrowing and shrinking real wages, we can expect food to continue making the running for sales growth for the time-being, although driven more by price than volume, with non-food continuing to struggle.”
Meanwhile, non-food like-for-likes dropped 0.7 per cent and 0.4 per cent on a total basis, well below the 0.4 per cent positive growth average.
Online non-food sales also slowed to a growth of 8.3 per cent, compared to 11.2 per cent a year earlier.
This dip was reflected in the three-month average, seeing non-food online sales slow to 7.8 per cent compared to the 8.4 per cent yearly average.
KPMG’s UK head of retail Paul Martin said: “Bucking the overall trend in non-food, children’s footwear seems to have been a popular purchase, no doubt encouraged by the start of summer holidays.
“Elsewhere, the rainy month turned attention indoors, with furniture and home accessory sales benefiting. For online retailers, everyone appeared to be a winner, but once again health and beauty was a strong performer in the month.
“Interestingly, July retail sales diverge from the latest consumer confidence figures, which noted a downturn in consumer sentiment. This divide suggests that UK shopping patterns remain mixed, although with demand continuing to be weak, retailers would be wise to remain cautious.”
The news comes just a day after Visa revealed consumer spending dropped for a third consecutive month, marking the first three-month decline since February 2013.
Visa said this was evidence that households were feeling the squeeze from rising prices and stagnant wage growth.