LAST week, the CBI announced UK retail sales growth slowed to their lowest level for seven months.

Of course, we love a summer event to which those with a vested interest inevitably attach expectations of a retail spending spike.

A Jubilee, a Royal Wedding, an Olympics. A successful World Cup.

The professional shoppers among you may well have noticed that when England’s demise was made official by a Costa Rican victory over Italy, any England shirts bought in the throes of imminent World Cup hysteria were probably still within their 14-day guarantee period, and thus return-and-refundable.

But the drop in retail sales is far from the product of our predictable summer tourna-mental meltdown.

No, in actual fact, decreased demand for the two staples, clothing and food, was to blame.

Retail sales matter to us because our expectation-exceeding economic recovery has been driven by consumption.

We are a consumption-led economy.

Indeed, retail sales themselves represent just short of six per cent of our economic activity.

As useful as a slight shift towards export-led growth would be, we need sustained and reliable consumption to preserve our current growth path and to achieve it, the Governor of the Bank of England would like to see real wage growth.

A steadily decreasing rate of inflation helps in that regard, but can’t be relied upon forever; so the wage growth side of that particular equation must be attended to.

But inflation has another use here.

Low inflation means the purchasing power of cash isn’t being morbidly eroded and most bosses of retail firms would tell you they find the confidence of the consumer far more crucial than, say, a rise in interest rates.

Consumer confidence has been improving.

So how are those retail firms faring? In general, on a global basis, retail stocks are down this year.

The UK general retail sector is pretty much unchanged but the share prices of some of the prominent names are weaker than at the turn of the year.

It’s a mixed bag of positive and negative, but there are consistencies in both cases.

At the weak end of the scale are the out-and-out growth stocks.

Asos, whose previous share price performance had been nothing short of stellar, has gone from trading at above £70 a share to less than £30 at the time of writing.

Supergroup is another to have struggled.

On top of company-specific issues, both have warned on profits since January, and the market’s tariff for growth stocks that miss estimates is high.

On the flip-side, one pretty common thread among the top performers has been the ability to get it right in both online and in-store offerings; so called Omni-channel retail.

Next, Dixons and Carphone Warehouse - the latter two are to wed - have got it, and are examples of traditional shop-based businesses who have survived in the face of online competition by competing in both arenas.

And to our supermarkets, most of whom sit at the apex of food and clothing.

2013 was tough, and 2014 isn’t shaping up to be much better.

While a general dip in retail spending will have at least short-term effects on revenue, their problems are more of the long term structural variety.

Competition, price wars, which are moving from phoney war to armed conflict, and the obvious knock-on effects for margins, have put the sector in a bit of a mire.

But we must not forget we have economic expansion and the wider spending trends are improving.

The big players in food retail are hugely cash generative and those who have embraced the patterns of the future, namely online and convenience shopping, are well placed for the long-term.

Nick Williams is an assistant director at Brewin Dolphin and offers advice on a wide range of financial services to private clients, trusts, charities and pension funds. Past performance is not an indication of future performance. The value of any investment and any income can fall and you may get back less than you invested. No investment is suitable for all people and should you have any doubts you should consult an authorised financial adviser. The information contained in this article has been taken from public sources and is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.