TODAY'S TOP NEWS STORY: UK high street suffers again in July, fashion hit hard as shopper behaviour changes
It’s been a bad summer for the UK high street with fashion retailers hit the hardest. How bad? How about the worst summer since 2009 with underlying sales in the four weeks to July 26 down 1.1%, albeit against tough year-ago comparisons, according to the BDO high street sales tracker.
It was the third successive month of decline as sales also fell 0.9% in May and 2% in June.
Fashion retail sales last month fell 1.4% year-on-year, while homewares dipped 1.1% and lifestyle stores suffered a 0.5% decline, with outdoor goods stores performing poorly.
Although online sales were ahead 14.6% on-year, this was the slowest growth rate since BDO began tracking the category.
"The high street is in the grip of its worst summer in six years," BDO confirmed, adding that stores appeared to be losing out to bars and restaurants in the battle for disposable income.
Sophie Michael, head of retail and wholesale at BDO, said a strong month a year ago partly explained the decline but noted: "If this trend of falling sales continues into August, 2015 will go down as a very gloomy summer on the high street."
She added: "The political landscape is still settling down after the election and speculation over interest rate rises is creating uncertainty in the minds of retailers and consumers."
Retail sales volumes slowed in July, according to the most recent CBI distributive trades study, while the outlook for August was even gloomier, with its barometer of retailer confidence dropping to its lowest in two years.
Lower footfall levels in most of the country outside London were adding to retail woes, according to BDO. Some stores were also more reluctant to discount than this time last year.
Mike Shearwood, chief executive of Karen Millen, told The Guardian retailers were also fighting to deal with a dramatic change in the way people shop. Whereas in the past, people would visit several stores and try on a variety of outfits before making their choice, increasingly shoppers pick what they want online and head straight for a particular shop – cutting down the opportunities for retailers to entice them to buy other things.
“There has been a huge change in shopping habits,” said Shearwood. He added that retailers had also tried to cut back on discounting this summer, and this had not paid off for every chain. “This season has been mixed,” he said.
The BDO report surveys around 85 medium-sized retailers with around 10,000 units.
Official retail sales figures for July are published on August 20 by the Office for National Statistics.