London retail sales rose 6.2% on a like for like basis in July against a 0.9% decline in the rest of the UK.
The British Retail Consortium said food sales had held up but that clothing and footwear and more discretionary purchases did suffer.
July footfall in London was slightly weaker than in May and June, but remained above its year earlier levels. Middle Eastern and western European tourists helped boost London retail sales overall.
For the three months ended July like-for-like sales are 8% ahead in London against a 0.3% rise across the UK.
BRC director general Stephen Robertson said: "London retailers continue to outperform their UK counterparts, buoyed in July by tourists, discounts and the central London economy holding up better than the rest of the country. But factors affecting other parts of the UK, such as falling house prices and the squeeze on incomes are starting to impact on the capital, hitting sales of more expensive house-related goods."
KPMG head of retail Helen Dickinson added: "Central London has once again outperformed the rest of the UK, but by a lower margin than we have seen in the previous two months. There continues to be considerable variation in performance of individual retailers in the capital and significant swings in individual retailers performance on a week by week basis as they move into and out of promotional activity - highlighting how important such activity has now become in order to drive sales."