Signs are emerging that shoppers are tightening their belts as retail landlords warn the rate of sales growth has dipped as the cost of living pressures increase across their apparel and more discretionary-style tenants.

Even though food tenants are powering along, as are nail bars and chemists, there have been warning bells sounding for apparel and specialty stores sales, suggesting consumers are being more selective in their purchases.

ASX-listed Charter Hall Retail REIT and Region Group, formerly SCA Property, reported their full-year earnings on Tuesday, saying while the outlook was positive, there were economic and cost headwinds.

Both landlords have a high proportion of supermarkets and general food tenants, with Charter Hall also benefitting from pubs revenue through its Endeavour assets and petrol via its service station properties.

Region’s chief executive Anthony Mellowes said,“we are focussed on non-discretionary retailers, which has made Region more immune to economic headwinds”.

“With our range of tenants, we don’t go down when things are bad, and while there are signs there of some softening in sales growth for the discretionary tenants, we are not seeing an elevated level of defaults,” Mellowes said.

“But there has been a softening in the sales figures for July in apparel, where demand has started to come off.”

Region has a market value of $2.68 billion and invests in retail properties predominantly anchored by non-discretionary retailers, with long leases to tenants such as Woolworths, Coles and companies in the Wesfarmers group.

For the year, the group reported funds from operations, the more accurate measure for real estate investment trusts as its excludes one-off items of $192.5 million, down 0.1 per cent in the prior year. Region’s annual distribution was 15.2¢ per share, with the final instalment of 7.7¢ payable on August 31.