But the three-month trend rates of growth edged down from 2.7 per cent in June to 2.6 per cent in July for like-for-like sales, and from 5.4 per cent to 5.3 per cent for total sales.
Within the food and drink sector, sales showed some growth, though less than in June. Beer and ready-meals slowed after the football-related boost in June, but there were some good sales of wine and spirits.
Instore bakeries did well. Fresh vegetables and meat improved, but frozen foods were less popular.
"Sales growth slowed in July and the impact of the series of interest rate rises in dampening consumer confidence is beginning to become clear," said Kevin Hawkins, director general of the British Retail Consortium (BRC).
"Demand is sluggish and most growth is being driven by promotion, which is why the impact of unseasonable weather was amplified. The Monetary Policy Committee's desire to target house prices is already having unnecessary and unwanted consequences on the High Street. It needs to refrain from any further rises unless it wants to further test fragility of the consumer economy."
The BRC-KPMG retail sales monitor measures changes in the actual value of retail sales from a sample of retailers. The monitor measures the value of spending and hence does not adjust for price changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.
Retailers report the value of their sales and sales in the equivalent week a year ago. These figures are reported both in total and on a 'like-for-like' basis. The percentage increase in the value of sales on a 'like-for-like' basis removes the effect of the expansion of retail floorspace by the retailers concerned on their sales total.
Due to the sample being biased towards large retailers, the 'like-for-like' increase usually provides a more accurate guide to general spending patterns, though it will be biased downwards as an estimate of the growth rate for retail as a whole.
The July 2004 monitor covers four weeks from 4 to 31 July and provides the most up-to-date reflection of recent retail performance. The August 2004 monitor will be published on 6th September 2004. The data is collected and collated for the BRC by KPMG.