Shoppers have abandoned the high street this summer with sales in August being one of the worst on record*, according to figures released today by accountancy and business advisory firm BDO LLP.
BDO’s High Street Sales Tracker (HSST) for August shows UK high street sales declined -2.7% year-on-year - the worst August decline for three years.
BDO confirmed it is the seventh month in a row for negative in-store sales, and the eleventh month in succession where bricks-and-mortar growth has failed to exceed 1%.
As shoppers took a holiday from the high street, total in-store like-for-like (LFL) sales fell every week of August starting with a -3.9% fall in the first week. Sales continued to fall in by in week two (down -2.9%) and three (down -2.8%), before rallying slightly with the onset of the bank holiday weekend (down –1.1% for the last week).
The fashion sector saw its worst August since 2015, with sales down in-store in every week of August and down by more than 3% in three weeks of the month.
Homewares stores saw sales growth plummet -6.1% year-on-year in August from a base of +1.9% for August 2017 - the worst August for homeware since 2012.
Lifestyle was the only sector to avoid a fall in year-on-year growth, flatlining at 0%.
Online, non-store like-for-like sales in August were up by +13.7% from a base of +18.3% for August last year. The sluggish growth was the lowest seen for August since 2015 and constitutes the third lowest result in the year-to-date.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “The high street hasn’t seen any notable growth since October last year. With inflation continuing to bite on the weekly shop and the heatwave driving discretionary spending to bars and entertaining, there is even less disposable income heading to the high street.
“There are signs that retailer margins are being protected through tighter management of stock levels and shortening discount periods. However, next month is going to be an important bellwether for retailers leading into the crucial last quarter of the calendar year.
For the consumer, it is a question of priorities. In a climate of rising interest rates, prices rising and subdued real wage growth, there is limited discretionary spend left and that is taking its toll on fashion and homeware sales, especially bigger-ticket items.
As always, there will be winners and losers in retail as we enter the crucial last quarter of the year. With the holiday season over and most now returning to work, spending levels in the next six to eight weeks will quickly identify those retailers that have created a formula for success.”
* BDO has been monitoring retail sales for 12 years, with its High Street Sales Tracker first published in January 2006.
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