Fashion was weakest discretionary category in June, but e-tail recovered

We get lots of retail sales reports coming through but the regular monthly one from BDO is particularly interesting because it singles out several key super-categories, including fashion and is all about discretionary spend rather than essentials.

So what did the BDO High Street Sales Tracker tell us about June? Well, the month saw a return to growth in retail sales but physical shops were lagging behind. 

The tracker said that total like-for-like sales grew by 3.2% last month, which was the strongest result since August last year. But online sales really excelled with a 9.8% increase as sales in physical stores grew just 1.8%.

Worse news was that the fashion sector saw the lowest growth of any of the super-categories that are tracked with an uplift of just 0.9%. Again, online was in the lead, rising 9.9%, although this wasn’t enough to drag the fashion category into strongly positive territory given that physical store fashion sales dropped by as much as 6.7%. The fashion reading made it the 10th successive month of negative sales figures.

Looking at the good news, the 3.2% overall rise was the second successive positive month for total retail sales, following five months of negative results. 

Sophie Michael, Head of Retail and Wholesale at BDO, said: “Despite strong growth in online sales, the performance on the high street continues to be very disappointing. The latter half of the month saw much warmer weather, but this failed to drive footfall onto the high street and into stores. Retailers will be focused on finding actions that they can take to encourage consumers back in-store and increase sales”.

The tracker also showed that the homewares sector grew for the second successive month, despite online sales falling by 8.3%. Its relatively positive in-store performance meant that total sales managed to grow by 3%.

Overall sales in the lifestyle sector have remained positive throughout 2024, and total sales grew by 7.5% in June, with a positive result both across in-store and online. Lifestyle covers a wide range of categories including general household goods, gifts, health & beauty, leisure goods and stationery.

Sophie Michael continued: “After a prolonged period of negative results, the retail sector is finally starting to see an uptick in sales growth, perhaps in part due to inflation easing with consumers feeing more confident. However, the results continue to be volatile both across product mix and channels, which makes it very challenging for retailers to invest upfront when buying inventory and decide which promotional activity will be most effective, thereby bringing further challenges to an already stretched bottom line.

“Fashion retailers will be particularly concerned that they have now recorded negative sales on the high street for 10 months in a row. The new government has pledged to breathe new life into Britain’s high streets, with a five-point plan for bringing consumers back into town and city centres. For the UK’s struggling retail sector, this rejuvenation plan cannot come quickly enough.”