Retail sales increased by 3% in August as shoppers continued to hit the high streets but the growth in spending slowed.

Don Williams, Retail Partner with KPMG, which has analysed the data in conjunction with the British Retail Consortium, said: "Much like the summer weather, retail performance in August was mixed."

July sales had grown by slightly more at 3.9% and Helen Dickinson, Chief Executive, British Retail Consortium, said it indicated that post-lockdown pent-up demand had 'softened'.

The 3% increase is well below the three-month average growth of 6.9% and the 12-month average growth of 10.3%.

Helen Dickinson said: "We still saw growth above pre-pandemic levels, as people returned to stores in greater numbers. With the wedding season in full swing and workers gradually returning to the office, formalwear was a strong performer.

"Additionally, the bank holiday weekend and back-to-school buzz contributed to a rise in non-food sales. While the online sales growth has begun to slow, it is still high when compared with pre-pandemic growth rates."

This demonstrates how Covid has shifted the instore and online balance for shopping and increased the link between the two.

She added: "With a precarious economic backdrop and retailers grappling with higher costs across the supply chain, the Government needs to deliver on its promise to reduce the burden of business rates that are holding back investment in recovery from the pandemic.

"If not, we will see the number of shuttered stores continue to rise and more jobs lost. This will seriously impact communities right across the country, and those already most economically deprived will be hit the hardest, putting the levelling up agenda in jeopardy."

Don Williams, Retail Partner, KPMG, added: "Sales growth on the high street continued to slow, with footfall still below pre-pandemic levels and online sales took a retreat from the highs of last year, whilst some discretionary non-food categories continued their recovery."

Food sales growth was just 1.9% as consumers enjoyed a fully re-opened hospitality sector. Online sales fell back by 2.5% compared to August 2020. Clothing, footwear and accessories continued their recovery, whilst technology and furniture and appliance categories suffered against very strong comparatives in 2020.

He said: "With the retail recovery showing signs of slowing, the sector is expected to grow at a more muted rate as retailers face increasing challenges on a number of fronts. Inflation is expected to accelerate putting pressure on household spending, whilst retailers battle for share of wallet as consumers spend money on leisure, entertainment and travel."

Meanwhile, data from credit card firm Barclaycard showed spending climbed by more than 15% compared with 2019, as staycationers splashed out on pubs and restaurants, as well as buying new clothes for school and work.