The British Retail Consortium (BRC) and KPMG monthly sales monitor found that non-food online sales dropped 4.6 per cent in August, with 38.3 per cent of sales now online compared to 42 per cent during the same month a year earlier.

Total retail sales managed to continue rising in August – up 3 per cent compared to a month earlier – but the speed of growth slowed significantly.

In July the rise was 6.4 per cent but experts suggest the pent-up demand building during the various Covid-19 lockdowns and restrictions is coming to an end.

Retail sales are rising in physical stores.

The 3 per cent rise in sales last month was driven by formalwear, the BRC said, with workers returning to offices and the wedding season in full swing.

Nonetheless, separate figures released over the weekend by PwC showed a net decline of retail 1,181 operators in the first six months of 2021 across the North of England, including a net decline of 434 stores across Yorkshire.

Helen Dickinson, BRC chief executive, said: “As post-lockdown pent-up demand has softened, the growth in retail sales we have seen over the past few months slowed for August.

“Nonetheless, we still saw growth above pre-pandemic levels, as people returned to stores in greater numbers.

Online ales are falling but experts warn pent-up demand is falling.

“With 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.”

Don Williams, retail partner at KPMG, 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.”

The BRC added that food sales continue to increase, up 2.9 per cent in August compared with a year ago.

However this remains below the 12-month average growth of 14.4 per cent as shopping habits return to normal.

Meanwhile the signs that consumers are spending more on other activities was played out in the latest Barclaycard data.

The card company said spending rose 15.4 per cent in August compared with the same period in 2019, before the pandemic.

All leisure sectors, apart from international travel, grew included restaurants, which rose for the first time in more than 17 months.

Consumer confidence has reached its highest point since February 2020 although concerns over inflation are creeping in, Barclaycard said.

Shoppers are returning to physical stores as online sales continue to fall