High street bounces back with strongest sales growth in two years
High street bounces back with strongest sales growth in two years
- Total like-for-like retail sales in-store and online grew by +3.9% in August
- High street stores recorded strong sales growth of +5.2%
- This is the highest growth on the high street since August 2023
- In-store and online sales were above inflation for the first time this year
Total like-for-like retail sales in discretionary categories (fashion, homewares and lifestyle) recorded robust retail sales growth of +3.9% in August, compared to a base of -0.7% in August 2024, according to the latest High Street Sales Tracker from accountancy and business advisory firm BDO.
Sales in bricks-and-mortar stores grew by +5.2% compared to August 2024, the highest level of growth in two years, since August 2023, following several months of poor performance on the high street. Online retail continued the strong performance it has recorded throughout this year, with sales increasing by +6.6% compared to the same month last year.
For the first time this year, the rate of sales growth in-store and online was above the rate of inflation indicating that volumes have also increased.
Sophie Michael, Head of Retail and Wholesale at BDO, commented: “Retailers have been under huge pressure this year, particularly on the high street, so these results will make very welcome reading for the sector. Given the disappointing performance of bricks-and-mortar stores this year, the strong growth of in-store sales during August is a very encouraging sign for retailers as we head into the crucial pre-Christmas trading period. However, it is likely that some of this growth was driven by heavy discounting and promotions, as retailers focussed on clearing their stock ahead of the autumn season.
“This approach may well have boosted sales in the short term, but it inevitably impacts profits and will certainly not be sustainable when we hit the “Golden Quarter” in the run-up to Christmas. With retailers’ cost bases higher than ever, thanks in part to changes to National Insurance contributions, maintaining margins is vital. For many retailers, continuing discounting to drive revenue simply won’t be an option. The good weather for much of August undoubtedly helped get more shoppers out onto the high street. However, as we get into autumn and the weather worsens, retailers may struggle to attract the same level of footfall.
“These are unquestionably positive results, and we want to see retailers maintain this momentum as they go into the most important part of the year. However, it is important to see these results in the wider context – they follow a very challenging period of non-existent growth and come just before what’s likely to be a tough few months of increasing costs and intense competition for consumer spending. Retailers will have to work very hard to maintain the level of growth we’ve seen this month, optimising their product and pricing, and making their stores places that customers enjoy spending time.
- Ends –
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