The BDO High Street Sales Tracker for August total like-for-like sales increased by 3.6 per cent compared to August 2021 compared to a base of +20.1 per cent in the equivalent month last year. Total non-store LFLs dipped into the red for the first time since March this year, with a fall of -0.6 per cent compared to August 2021.
Total in-store LFLs recorded the lowest result (+8.0 per cent) since the reopening of bricks-and-mortar shops last year.
August began with total LFLs recording a monthly high of +9.66 per cent, compared to +23.39 per cent for the equivalent week last year. However, growth slowed considerably in the second and third weeks of the month, as total LFLs rose by just +2.12 per cent and +2.06 per cent respectively. The final week, which included the August Bank Holiday weekend, saw total LFLs rise by +3.01 per cent from a base of +14.96 per cent for the same week last year.
August marks 18 consecutive months of positive LFL sales figures for the fashion sector, with a rise of +6.0 per cent this month from a base of +27.6 per cent. However, this is the sector’s lowest performance since February 2021, raising fears that consumers may be cutting their discretionary spending and choosing not to refresh their autumn and winter wardrobes.
Total LFL sales for the lifestyle sector increased by +4.9 per cent in August, compared to 20.6 per cent in August 2021. This is also the sector’s slowest growth since February 2021, and its poor performance was underlined by non-store LFLs recording a tenth consecutive month of negative results.
August was a particularly disappointing month for the homewares sector, where total LFL sales fell by -6.4 per cent, from a base of +10.1 per cent showing that consumers are choosing to put off major purchases.
Sophie Michael, head of retail and wholesale at BDO LLP, said consumer confidence is at a record low and the data clearly showed that discretionary spending is slowing.
“It’s no surprise to see the homewares sector performing poorly, which is an indicator that consumers are deferring the purchase of big ticket items as households prioritise essential spend,” she said.
“The slowing of growth in fashion and lifestyle will raise further concerns as we head towards Autumn and the Golden Christmas Quarter. September’s results will show just how significant the pull back in discretionary spending is likely to be this winter, but clearly these results in August show that consumers are cutting their budgets.
“Elsewhere, we are seeing reports that retailers are already ordering lower quantities of stock than they normally would at this time of year. With lower consumer spending, it will be critical for retailers to manage their inventory and not tie up their limited working capital in unwanted goods. The government has announced that it will support businesses through the current crisis, but questions remain as to whether this will go far enough to protect the sector from long term damage.”
