Retail figures in July have shown significant growth but the figures are being propped up by the lifestyle choices of ordinary Australians as they spend their money on takeaway food, cafes and restaurants, says the Australian National Retailers Association (ANRA).

ANRA chief Margy Osmond believes it was 'line ball' for retail without the hospitality services sector.

She said, "Consumers are still choosing to put money aside for a rainy day rather than taking it down to the shops for some retail therapy."

"We can take some heart from the upgrade of the May and June figures by the ABS, but while consumers are glad they have a job, interest rates are stable and confidence is up, there is still a great deal of caution out there."

"July had the Federal Election called mid-month which is likely to have put a stop to many households' spending, particularly on large items which is reflected in the drop of 1.7 per cent on household goods retailing.

"Retail had a poor start to the year and is still struggling to emerge from the impacts of the global financial crisis. Retailers have been discounting significantly and as we begin to prepare for Christmas the sector is not ready to break out the champagne in celebration quite yet," she said.

"Retailers would urge the RBA to consider the ever more obvious two speed economy in Australia and keep the brake on interest rates in the run up to Christmas."

The latest Retail Trade figures from the Australian Bureau of Statistics (ABS) show that retail sales increased 0.7 per cent in July, seasonally adjusted, compared with an increase of 0.4 per cent the previous month.

Cafes, restaurants and takeaway food services, which jumped 5.3 per cent, recorded the largest seasonally adjusted rise in July. This was followed by Other retailing with 1.4 per cent, Food retailing with 0.4 per cent and Clothing, footwear and personal accessory retailing with 0.2 per cent increase.

Sales in Household goods retailing decreased 1.7 per cent in July after a strong result in June. Department stores likewise shed 0.7 per cent.

Victoria, Queensland and New South Wales recorded the largest seasonally adjusted increases in July, gaining 1.7, 1.5 and 0.6 per cent, respectively. South Australia, which edged up 0.3 per cent and the Northern Territory, adding a moderate 0.2 per cent, followed.

Sales in Western Australia (-1.8 per cent), the Australian Capital Territory (-0.7 per cent) and Tasmania (-0.3 per cent) decreased in July.

Trend turnover increased 0.4 per cent in July 2010. This follows a 0.4 per cent increase in both June 2010 and May 2010. In the twelve months to July 2010 trend turnover increased 3.8 per cent

Sources: Australian National Retailers Association, Australian Bureau of Statistics