Retail sales climbed last month, as the high street saw its highest growth since August 2023.

Total like-for-like retail sales in-store and online rose 3.9% over the month, compared to a base of -0.7% in August 2024, the latest high street sales tracker from accountancy BDO revealed.

Bricks-and-mortar store sales were up 5.2% compared to last year, marking their highest level of growth since August 2023, after several months of poor performance on the high street.

Online retail saw sales rise 6.6% compared to the same month last year, as it continued its strong performance from throughout the year.

The rate of sales growth in-store and online was above the rate of inflation for the first time this year, indicating that volumes had also increased.

BDO head of retail and wholesale Sophie Michael said: “Retailers have been under huge pressure this year, particularly on the high street, so these results will make very welcome reading for the sector.

“Given the disappointing performance of bricks-and-mortar stores this year, the strong growth of in-store sales during August is a very encouraging sign for retailers as we head into the crucial pre-Christmas trading period.

“However, it is likely that some of this growth was driven by heavy discounting and promotions, as retailers focussed on clearing their stock ahead of the autumn season.”

She noted that while this approach “may well have boosted sales in the short term,” it inevitably impacted profits and would “certainly not be sustainable when we hit the ‘golden quarter’ in the run-up to Christmas”.

“With retailers’ cost bases higher than ever, thanks in part to changes to National Insurance contributions, maintaining margins is vital,” she said.

“For many retailers, continuing discounting to drive revenue simply won’t be an option. The good weather for much of August undoubtedly helped get more shoppers out onto the high street. However, as we get into autumn and the weather worsens, retailers may struggle to attract the same level of footfall.”

“These are unquestionably positive results, and we want to see retailers maintain this momentum as they go into the most important part of the year. However, it is important to see these results in the wider context – they follow a very challenging period of non-existent growth and come just before what’s likely to be a tough few months of increasing costs and intense competition for consumer spending.”

She said retailers would “have to work very hard” to maintain the level of growth they’d seen over the month, by “optimising their product and pricing, and making their stores places that customers enjoy spending time”.

The figures come after the British Independent Retailers Association (Bira) called on the Government for greater support in August, as River Island and Hobbycraft announced restructuring plans and Claire’s fell into administration.

The association expressed concern over the rising challenges faced by high streets, as a series of major retailers unveiled significant restructuring plans, store closures and job cuts.

The British Retail Consortium (BRC) also recently revealed that retail footfall fell in July, with both high streets and shopping centres seeing a decline in shoppers.

Click here to sign up to Retail Gazette‘s free daily email newsletter