Retailers have seen a slowdown in spending growth as shoppers cut back due to faltering wage increases and higher inflation.
Figures from the British Retail Consortium and KPMG showed that like-for-like sales grew by 0.9% in July, down from the 1.1% growth seen in the same month last year.
It was also down from the performance in June, when an increase of 1.2% was recorded.
The results come as growing inflation and struggling wages translate into an expansion of credit and decline in savings.
Paul Martin, KPMG’s UK head of retail, said: “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.”
BRC chief executive Helen Dickinson said: “Sales growth slowed in July from June.
“That said, given the strong performance of the same month the previous year, the figures are fairly solid.
“Closer inspection of the headlines however unveils some familiar challenges.
“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.
“Despite the gloomy picture for non-food overall, there were some success stories.
“The homewares category for instance, which lost out in the previous month to summer wardrobe purchases, moved to the top of the performance rankings.”
The latest official figures showed retail sales had rebounded in June, mainly thanks to strong spending on clothing during the warmer weather.
On Monday, Sky News reported on Visa’s Consumer Spending Index, which said that consumer spending in the UK had dropped for the third consecutive month – marking the longest period of decline in four years.
The figures suggested more people were choosing to holiday at home thanks to stagnant wage growth and a weaker pound.