UK high streets suffer worst August sales in three years | Business

The UK high street has posted its worst August performance for three years, in further evidence of the pressure on traditional retailers.

Underlying sales at physical stores slid 2.7% last month, compared with August 2017, with homewares and fashion taking the biggest hit, according to the latest data from the advisory firm BDO, which monitors mid-sized, non-food chains.

“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,” said Sophie Michael, BDO’s head of retail and wholesale.

She said rising interest rates and subdued wage growth meant there was little spare money to spend on fashion or expensive homewares, contributing to declines in underlying sales of 3.6% and 6.1% for those sectors respectively.

BDO said August was the seventh month in a row during which high-street sales had fallen, with no boost from an apparent trend towards staycations.

While the difficulties on the high street were offset by a 13.7% rise in online sales in August, according to BDO, the latest data will fuel gloom about the future for town centres, which have been hit by a wave of retail closures this year.

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The difficult August for non-food retailers also pours cold water on hopes raised by an unexpected lift in retail sales in July, when consumers spent heavily on supermarket food and drink as they enjoyed good weather and England’s extended World Cup run.

Heavy discounting by clothing stores also brought shoppers back to the high street in July, reversing a decline in sales in June.

Michael said there were signs that retailers had protected their profit margins by keeping stocks tight. However, the troubles of major chains, including House of Fraser and Debenhams, have spawned discounting across the market.

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