High street sales slumped in July, falling behind online trade, according to business advisory firm BDO. 

Total like-for-like retail sales in-store and online grew by +2.8% in July, compared to +3.0% in July 2024, according to the company’s latest high street sales tracker.

Revenues in bricks-and-mortar stores increased by +0.8% compared to the same time last year, delivering a result significantly below inflation.

However, online sales boosted the sector’s growth this month, with revenues increasing by +8.3% compared to the same month last year. 

In addition, fashion ecommerce sales grew by +10.1% compared to in-store sales of +1.3%.

The figures marked the seventh consecutive month of lower in-store sales, which reflected the sector’s ongoing struggle to get shoppers spending money on the high street, BDO reported.

BDO head of retail and wholesale Sophie Michael said: “Consumers are under huge pressure. Food inflation remains stubbornly high and this is leaving shoppers with very little disposable income for non-essential spend. 

“We naturally expect retail sales to be challenging during the school holidays as families fly overseas and prioritise disposable income in spending on experiences and social activities. 

“But this month’s figures point both to a longer-term trend – the strengthening of online retail’s supremacy over the high street – and the economic challenges the UK is facing.”

BDO said the online sales growth demonstrated that easy access to the best deals or a product range that “hit the moment just right” could encourage shoppers to spend. 

However, it noted that bricks-and-mortar stores “struggle to match this agility” and “continue to find it much harder to respond to trends or quickly pivot to changes in consumer preferences”.  

Michael added: “There have also been recent reports of the return of the ‘lipstick effect’ on consumers as they look to small, affordable treats like lipstick to lift their mood during an economic squeeze. 

“By offering affordable, luxury items, retailers may be able to attract the consumer in for larger spends. 

“August may be a difficult month to ramp up sales, but retailers need to do everything they can to convert summer stock to sales revenue.”

Earlier this month, BDO reported that the British high street suffered a slow June, as consumers, swayed by warmer weather and economic jitters, chose to shop online instead.

In-store sales increased by just 0.6% year-on-year, while non-store sales, which included online, rose 4.3%.

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