The Office for National Statistics (ONS) said total retail sales volumes in July rose 3.6 per cent compared with June and are now 3 per cnet above pre-pandemic levels.
But it said there is a distinct split emerging between food and online retailers, which have surpassed February’s sales figures, and non-food businesses, which have not.
Deputy national statistician for economic statistics Jonathan Athow said: “Retail sales have now regained all the ground lost during the height of the coronavirus restrictions as more stores open for trade and online sales remain at historically high levels.
“While still below their pre-pandemic levels, both fuel and clothing sales continued to recover.
“Meanwhile, food sales fell back from their recent peaks as people started to venture back into pubs and restaurants.”
In July, the volume of food store sales fell 3.1 per cent compared with June. Online sales also fell from June highs – back 2.1 per cent – although both measures remain above pre-pandemic levels.
As of July, clothing sales were 25.7 per cent lower than February.
The retail industry contributes around 5.4 per cent to gross domestic product.
However, the pandemic has led to more than 40,000 job losses already announced in the sector.
Federation of Small Businesses national chairman Mike Cherry said: "In what is no doubt one of the toughest periods of trade for small businesses in recent history, it's promising to see that people are indeed confident enough to go out and shop once again.
"One clear sign that people are physically shopping once again is the first drop in online sales (down 7 per cent on June '20) since November 2019, which after a record period of online sales throughout lockdown was inevitable. But many small firms, especially in recent months have either expanded or developed their online presence, so it’s vital that both physical as well as online sales remain buoyant.
"Many small firms have been only open for a matter of weeks, but the support that was on hand such as a the job retention scheme, incentives like Eat Out to Help Out and access to funds via local authority grants are all going to be closing or wound down over the next few weeks or months, which means that the struggles for small businesses show no end in sight.
"We are in the midst of the deepest recession on record, and we need the Government to take a proactive approach to how it will support business right across the country.
"We are calling on the Government to issue the most pro-business, pro-self-employed Budget ever seen that encourages innovation, brings goods and services to market while avoiding taxes that could further stifle already struggling businesses.