High street retailers suffer sales drop of 2.2%

Britain’s retailing backbone has suffered its worst trading performance in two years with little respite in sight, according to research published today.

All sectors covered by BDO’s latest high street sales tracker reported year-on-year sales declines, casting fresh doubt on the resilience of the UK consumer in the face of mounting job fears, stubbornly high inflation and weak wage growth.

The accountancy firm’s survey is one of the most comprehensive of its type and focuses on spending at non-food retailers with annual sales of between £5 million and £500m. It monitors the weekly sales changes of firms that collectively operate some 10,000 stores.

BDO also cited the rioting that blighted some towns and cities south of the Border as a factor, noting that even areas not affected directly by the trouble had felt the pinch, as police advice to close early ate into trading hours.

Today’s findings will reveal an overall year-on-year sales drop of 2.2 per cent in the four weeks to 28 August, making it the worst month for like-for-like sales in two years, BDO said.

The fashion and homewares categories both recorded falls of 2.4 per cent, with the former seeing more mainstream brands hit particularly hard by a drop in footfall. Despite modest gains in luxury sales, non-fashion taking still dropped by 1.8 per cent.

Don Williams, national head of retail and wholesale at BDO, said: “Ever since the recession hit, smart retailers have been working flat out to keep consumers spending in an extremely tough trading environment. But the scale and ferocity of the disruption we saw in August was a real body blow.

“We don’t expect the pressure on consumer confidence to ease – or the cash they have in their pockets to increase – so we’re not expecting the sort of ‘keep calm and carry on’ sales uplift that we might see if the economy was in better health.”

BDO predicted that while volumes would remain subdued, the overall level of spend “should hold”.