Wettest August in 100 years a washout for retailers
UK high street stores have endured their worst month of falling sales since the financial crisis as August proved a washout for retailers. Sales fell 4.3% compared to the same month a year ago according to the latest figures from accountancy and business advisory firm BDO.
It was the biggest fall since November 2008 and the fourth month in succession of decline.
Miserable weather dampened shoppers’ appetites for outdoor goods in cycling and hiking stores, the report said. It comes after Halfords said this week that cycling sales had slumped during the soggy summer.
Meanwhile fashion sales were down 5.5% as retailers held back on discounting, with a tight control on stock to protect profit margins – meaning there was less to offer on the bargain rails.
Homeware sales fell 3.3%, led by a decline in big ticket items such as furniture while home improvement was also weak, blamed on many consumers delaying work on their properties until they returned from holidays.
The report said consumers deserted the high street in favour of spending abroad, with the strength of the pound making purchases overseas attractive while tourists to the UK were holding back because sterling’s strength makes UK goods dearer.
Other leisure pursuits such as eating out also appeared to benefit at the expense of the retail sector.
The report added that “political and macroeconomic uncertainty” was weighing on shoppers’ minds – at a time of turbulence in stock markets prompted by fears over the Chinese economy and the likelihood of a UK interest rate hike within months.
There was a glimmer of hope for high street retailers as performance improved at the end of August. Sophie Michael, head of retail and wholesale at BDO, said: “The last week of August was cold and wet enough to make people think about autumn, so fashion retailers saw an uplift in sales in that final week that this summer’s fragmented discounting has so far failed to deliver.
“With the holiday season over and the summer weather starting to fade, retailers will be hoping this is the start of a shopping spree that sees them into the autumn season and beyond.”
Commenting on the washout figures Daniel Todaro, managing director of field marketing agency Gekko said: “In the midst of an August sales slump, retailers need to raise their game and maximise opportunities with shoppers visiting the high street. With a recent increase in average disposable income giving shoppers extra spending money, retailers need to ensure that they are providing an excellent customer experience with expert advice to influence purchases.
“Our recent consumer study, which investigates what drive shoppers in-store and online, has revealed that 50 per cent of shoppers feel a lack of in-store staff is impacting on their final decision to make a purchase. Moreover, 36 per cent of shoppers use advice from an in-store expert to influence their purchase decisions, an important point when considering the sales slump. Perhaps a focus on improving the omnichannel experience and maximising opportunities to interact with shoppers on the shop floor would improve the fortunes of the high street.”