Total retail sales have increased by just +0.7% compared to August last year according to this month’s High Street Sales Tracker from BDO. The tracker reveals another disappointing month for the high street, as in-store sales have fallen once again, this time by -0.7% compared with August 2023.
Despite reports signalling that retail prices had fallen for the first time in three years during August, sales growth figures are still running below the rate of inflation. This means that although consumer spending seems to have marginally increased, this has not actually led to a rise in the volume of sales.
Sophie Michael, head of retail and wholesale at BDO, commented: “This month’s data represents minimal sales growth and another disappointing month for high street retailers. August is often a quiet month for the sector, but these numbers show that changes to consumer behaviour may continue to disproportionately impact bricks-and-mortar stores.
“We’ve seen reports of heavy discounting from retailers in order to shift summer stock, but this alone does not seem to have done the trick. With increases to energy bills expected in October and a huge number of homeowners likely to be re-mortgaging to higher rates in the latter half of this year, there is still huge competition for the consumer purse in discretionary spend categories. Other reports show spending on non-essential items seems to be lagging behind expenditure on experiences and leisure activities.”
Looking across the different categories of the tracker, the homewares sector recorded a disappointing performance, with sales declining -0.5%. The fashion sector told a similar story, with overall sales declining by -0.4% compared to the same month last year. The lifestyle sector provided the only set of positive results, with sales +3.2% above August last year.
Michael concluded: “September will be a critical month and provide some indication of what retailers may expect from consumer spend ahead of the so-called crucial ‘Golden Quarter’ in the run-up to Christmas.
“Profit margins remain incredibly narrow, especially with increased operating costs. Those who are agile enough to adapt to changing consumer demand and behaviours will likely be the best performers and play a pivotal role in stopping the British high street merely becoming a ‘window shop’ for customers.”
