The high street took a hit in August as shoppers went holidays for the summer, with sales at their worst in three years, according to new data.
The monthly high street sales tracker from accountancy and business advisory firm BDO indicates that UK high street sales fell by 2.7 per cent year-on-year – the worst August decline for three years.
BDO also said it was one of the worst Augusts seen since records started in 2006.
The figures are a contrast to retail sales figures from the BRC and KPMG released earlier this week, which shows that August sales increased by 0.2 per cent on a like-for-like basis compared to the same period a year ago.
Despite this, it was a slower growth compared to the rise of 0.5 per cent in July, when buoyant spending on food and drink delivered a welcome jolt to the sector.
The BDO said the fashion sector saw its worst August since 2015, with sales down in-store in every week of August.
Meanwhile, homeware stores saw sales growth plummet by 6.1 per cent year-on-year in August – the worst August for homeware since 2012.
“With inflation continuing to bite on the weekly shop and the heatwave driving discretionary spending to bars and entertaining, there is even less disposable income heading to the high street,” BDO head of retail Sophie Michael said.
“There are signs that retailer margins are being protected through tighter management of stock levels and shortening discount periods.
“However, next month is going to be an important bellwether for retailers leading into the crucial last quarter of the calendar year.”
She added that a climate of rising interest rates, rising prices and subdued real wage growth meant “there is limited discretionary spend left and that is taking its toll on fashion and homeware sales, especially bigger ticket items”.
“As always, there will be winners and losers in retail as we enter the crucial last quarter of the year,” Michael said.
“With the holiday season over and most now returning to work, spending levels in the next six to eight weeks will quickly identify those retailers that have created a formula for success.”