High-street sales fell in July compared to a strong June performance, according to figures released yesterday. Analysts predicted that the momentum of sales activity would continue to slow. The figures also contain evidence that the high price of drinking out is affecting the pub trade.

When adjusted for seasonal fluctuations, the volume of retail sales fell by 0.5 per cent in July, according to the Central Statistics Office (CSO). Sales remained some 5.5 per cent higher than a year ago but by a lower margin than in June.

Rising household formation pushed furniture sales up a further 9.6 per cent in July over June levels and up by 8.4 per cent on July 2005. Sales of household hardware products were also strong, 5.9 per cent up on June and 11.6 per cent higher year-on-year. But these trends were not enough to overcome a poor result in motor sales, which fell 0.5 per cent in the month in seasonally-adjusted terms.

Despite the strong performance of furniture and household sales, volumes excluding motor sales still performed poorly, dipping 0.1 per cent in July. Clothing sales fell by 9 per cent compared with June, while sales of footwear and leather products fell by 5.1 per cent. Sales in book and stationary stores and specialised food business fell marginally in the month.

"We are unlikely to see any major bounce in spending when the August data are released in a month's time. Indeed, further modest slippage seems more likely than not," Ulster Bank chief economist Pat McArdle said yesterday.

At 0.7 per cent, growth in bar sales volumes was significantly slower than average retail sales.