August proved to be a damp squib for the retail sector despite the heatwaves. The latest High Street Sales Tracker data from accountancy and business advisory firm BDO shows that total sales across the discretionary retail categories grew by just +2.2% in August, compared to +3.9% in the same month last year.
Growth remained below the rate of inflation, meaning sales volumes have dropped for the sixth time this year.
August is typically a strong month for retail, with back-to-school and new autumn ranges driving growth, but this year’s BDO results fall below the overall average for the month, excluding the COVID-19 period.
Consumer confidence remains weak
Sophie Michael, head of retail and wholesale at BDO, suggested this points to an underlying lack of consumer confidence. “Despite consumer confidence reaching a two-year high following the appointment of a new Prime Minister and reflecting the so-called ‘Burnham Bounce’, this may be short-lived as energy bills are set to rise again in October and households face continued cost pressures,” she said.
“With the first Budget under the new Prime Minister and Chancellor due at the end of October, pressure is likely to grow on the Government to provide targeted support for retailers as they brace for the most important trading period of the year.”
BRC data follows a similar trajectory
Michael’s view was echoed by Helen Dickinson, chief executive of the British Retail Consortium, who called for more government support for the sector after the latest BRC – Sensormatic data showed that total UK footfall decreased by 1.7% in August (YoY), although up from -2.1% in July.
“Retailers don’t need warm words, they need lower costs,” she said. “With his first Budget weeks away, Chancellor Healey has a chance to throw Britain’s high streets a lifeline. Retail faces cost pressures and households are watching every penny.
“Government action on business rates and energy costs would help keep prices down, support investment, and sustain the jobs and communities that retail underpins across the country,” she added.
