High street sales freeze in the summer chill as shoppers head abroad
4 min read
04 September 2015
High street sales have slumped to their worst level since the start of the global financial crisis in 2008 as retailers experience a "summer to forget".
The UK’s high street endured its worst month since the beginning of the global financial crisis in August, hit hardest by bad weather and Brits heading abroad.
The BDO’s monthly High Street Sales Tracker revealed that August recorded a huge 4.3 per cent drop in year-on-year sales, the biggest fall since November 2008 and worryingly the sixth monthly dip of 2015.
All retail sectors suffered in what BDO described as the “summer to forget” with fashion sales down 5.5 per cent during the month, homewares down 3.3 per cent and lifestyle goods off 1.3 per cent.
Online sales grew 11.4 per cent but the like-for-like growth is the lowest ever recorded by the BDO index.
Sophie Michael, head of retail and wholesale at BDO said the high street had lost out as UK consumers opted to spend their disposable income on leisure pursuits, eating out and holidays.
“The strength of the pound has encouraged Brits to spend more abroad rather than in the UK,” she added.
However the BDO said there were some glimmers of light at the end of the “gloomy” month.
“The last week of August was cold and wet enough to make people think about autumn, so fashion retailers saw an uplift in sales in that final week that this summer’s fragmented discounting has so far failed to deliver,” said Michael.
“With the holiday season over and the summer weather starting to fade, retailers will be hoping this is the start of a shopping spree that sees them into the autumn season and beyond. Retailers likely to benefit in the coming months are those with the right product, at the right price with aligned multi channels.”
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However Rob Fenton, managing director of business data agency fifty-five, believes the high street is in permanent free-fall.
“This deep and consistent decline in the high street comes in spite of a very positive economic climate with both disposable income set to surge by 3.7 per cent and consumer spending expected to jump by 3.2 per cent this year,” he said. “With figures like these high street retailers could be expecting bumper high street sales figures, but clearly this isn’t happening. And it won’t anytime soon no matter how positive the economic indicators.”
Fenton said consumers were now mainly shopping online because of the choice and convenience on offer.
“It is an irrevocable trend which the UK retail industry must adjust and adapt to and one which shouldn’t actually be feared,” he continued. “We should stop reporting on high street footfall figures from now on because they will continue to go down and are nowhere near rock-bottom yet. But it simply doesn’t matter because high street footfall is an irrelevant throw-back to a previous economic era. We need to ditch high street footfall as an economic bell weather and start reporting on the combined footfall and sales of stores and online together. We will then see the true positive economic success of the UK’s retail sector.”