Total like-for-like retail sales (in-store and online) grew by 2.8% in July, compared to a base of 3.0% in the same period last year, according to the latest High Street Sales Tracker from business advisory firm BDO.
Sales in bricks & mortar stores were up just 0.8%, delivering a result significantly below inflation, suggesting another reduction in volumes.
Online trading propped up the sector’s growth, with sales increasing by 8.3% year-on-year.
This is the seventh consecutive month of lower in-store sales, reflecting the sector’s ongoing struggle to get shoppers out onto the high street and spending money.
Sophie Michael, Head of Retail and Wholesale at BDO, commented: “Consumers are under huge pressure. Food inflation remains stubbornly high, and this is leaving shoppers with very little disposable income for non-essential spending.
“We naturally expect retail sales to be challenging during the school holidays as families fly overseas and prioritise disposable income in spending on experiences and social activities. But this month’s figures point both to a longer-term trend – the strengthening of online retail’s supremacy over the high street – and the economic challenges the UK is facing.”
BDO noted that the growth in online sales demonstrates that easy access to the best deals or a product range that hits the moment just right can encourage consumers to spend. Bricks & mortar stores struggle to match this agility and continue to find it much harder to respond to trends or quickly pivot to changes in consumer preferences.
Michael added: “There have also been recent reports of the return of the ‘lipstick effect’ on consumers as they look to small, affordable treats like lipstick to lift their mood during an economic squeeze. By offering affordable, luxury items, retailers may be able to attract the consumer in for larger spends. August may be a difficult month to ramp up sales, but retailers need to do everything they can to convert summer stock to sales revenue.”
