Total retail sales were 3.6% up on July 2008, and food and drink stores led the rally, with like-for-like sales up 4.2% and total sales ahead by 5.5%.
But food sales growth slowed since June, reflecting lower inflation said the BRC.
The growing importance of internet and mail order was emphasised, with sales up by a fifth on a year ago.
BRC director general Stephen Robinson said: “July showed us both sides of the British summer and gave some parts of retailing a much-needed boost.
“There is a sense among some consumers that the beginning of the end of the recession is here, but rising unemployment and job-loss fears will continue to hold back the widespread return of consumer confidence for some time yet.”