Despite increasing consumer confidence and spending power, retailers failed to improve on August 2015 which was one of the worst months experienced by the high street since November 2008.
Sales of lifestyle goods in August (up 0.7% year-on-year) benefited from tourists taking advantage of the weak pound and a flurry of sporting activity inspired by the Rio Olympics. Homewares retailers also had a good month (up 11.3% year-on-year), boosted by strong sales of furniture and soft furnishings.
But these gains couldn’t compensate for the continuing struggles of the fashion sector. Fashion sales were down by 3.3%, despite heavy discounting and a weak base of -5.5% in August 2015. In particular, fashion sales dropped by 9.6% in the last week of August, as sales ended and many people took a late summer holiday or chose to spend their disposable income elsewhere.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said retailers had failed to put last summer’s woes behind them and deliver a positive story for 2016.
“Footfall was up for most of August, but the majority of retailers struggled to consistently translate recent positive consumer sentiment and increased spending levels into in-stores sales,” she said.
“Despite this, we have seen some signs that will encourage retailers as we approach the last quarter day before Christmas.
“Online sales grew by 21.1% for the month – a monthly rise which has only been beaten once this year.
“A real success story for some British retailers has been their ability to tap into shoppers’ increasing desire to use non-store channels, and this will leave online savvy retailers very well positioned as shoppers’ habits continue to evolve.”
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Accountancy and business advisory firm BDO LLP has a clear ambition to be known in the market for exceptional service delivered by empowered people. The Mid-Market Monitor shows that BDO is the market leader for client satisfaction for the fourth year running – outperforming all its major competitors.
BDO’s heartland is the mid-market. The UK mid-market accounts for less than 1% of all firms but delivers a third of UK revenue and one in four jobs. In the last five years, medium-sized businesses have grown turnover by 55% and profits by 110%. BDO’s New Economy research (www.bdo.co.uk/neweconomy) calls for the government to put the UK mid-market at the heart of its plans to rebalance the economy and help this already successful sector expand further.
BDO LLP operates in 18 offices across the UK, employing 3,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO International network with revenues approaching £400m.
The BDO International network provides business advisory services in 154 countries, with 64,500 people working out of 1,400 offices worldwide. It has revenues of $7.3bn.
Rebecca Williams or Sophie Longley
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