Like-for-like sales, were 0.1% higher than July last year according to the report, beating economists’ expectations of a 0.2% fall.
Total sales values rose 2% last month compared with a year earlier, after warm weather at the end of the month and extended Sunday trading hours brought in for the Olympics provided a boost.
It follows a 3.5% rise in sales in June.
However, the British Retail Consortium and KPMG have warned that despite a modest rise in retail sales in July, hopes that the Olympics will transform retailers’ fortunes are ill advised.
Stephen Robertson, director general of the BRC said, “Like-for-like sales were virtually flat compared with a year ago and total growth of 2% was still behind inflation as consumers, dealing with squeezed budgets, prioritised their spending on essentials."
Food retailers were helped as shoppers stocked up on party food and drink as the Olympics began, but a sharp fall in food inflation dampened top line growth. Clothing and footwear sales were boosted by the wet weather throughout most of July which coincided with new autumn ranges hitting the shops, the report said. A rolling three-month average showed the growth of like-for-like non-food sales outpaced food sales for the first time since May 2010.
Helen Dickinson, head of retail at KPMG, said despite the rise in sales in July, the latest figures reflected ongoing difficulty among retailers.
“Sadly July was a lacklustre month and it’s doubtful this trend will change as early expectations that the Olympics will raise retailers’ fortunes look to be wide of the mark. Central London’s retailers are already being hit hard by shoppers actively avoiding the capital. It’s likely that any blip of benefit the games bring will be short lived.”