Retail sales growth slowed in July to a greater extent than had been expected.

The CBI’s latest monthly Distributive Trades Survey revealed retailers reported a third consecutive month of rising year on year sales and orders in July but growth rates fell back.

In covering the first two weeks in July, 44% of retailers stated that their sales volumes were up on a year ago, while 33% reported a fall. The resulting growth rate of 11% was weaker than the 32% rise retailers had anticipated for July.

Firms also reported growth in orders up 5%, although again at a much slower pace than had been expected.

In August, retailers expect both sales and orders growth to be flat on a year ago.

As well as seeing slower growth, sales continued to be below average for the time of year down 14% while, relative to expected demand, stock levels also rose 21%, from 11% in June.

Many retail sectors saw an increase in year-on-year sales growth, notably furniture and carpets up 62%, clothing up 56%, footwear and leather up 42% and grocery up 47%. But reflecting the headline trend, all of these sectors saw sales growth slow compared to last month.

Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief operating officer, said: “Retailers reported an annual rise in sales and orders for the third month in a row, but the increase was far slower than firms had anticipated.

“The unprecedented poor weather for the time of year did not help, but retailers also expect conditions to remain tough during August. With consumer confidence weak and wage growth remaining sluggish, the longer term outlook for retailers remains challenging.”