High Street Enters Seventh Consecutive Month Without Growth, Despite Increasing Consumer Confidence

The UK’s high street retailers have failed to increase sales since January, figures released
today by BDO show.

The August figures for BDO’s monthly High Street Sales Tracker (HSST) recorded a 1.5% drop in overall year-on-year sales for August – the seventh month in a row with no sign of growth.

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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