UK high streets witnessed their best sales performance in nearly two years last month, a new report has found.
Recent surveys have shown a gradual decline in consumer confidence and discretionary spending, but according to figures released by accountancy and business advisory firm BDO, overall like-for-like sales increased by 2% in August.
It was biggest rise since September 2015 and the strongest performance for the month of August since 2013.
BDO’s figures show how a marked rise in ‘staycations’ by Brits and an influx of overseas tourists – both of which have been driven by the weak pound – helped push sales of lifestyle goods up 3.1% year-on-year in August.
Fashion sales have struggled all year to generate growth, but a like-for-like rise of 1.5% for August represented the sector’s best performance since last November.
The news wasn’t all positive for retailers though. The overall growth came after two Augusts of negative growth – particularly in the fashion sector, which dropped 3.3% in August 2016 and 5.5% in August 2015.
Footfall also decreased throughout August as patches of bad weather dampened spending, but non-store sales also struggled at 18.3% overall for the month, the second lowest monthly growth rate in the year-to-date.
Non-store sales in the lifestyle sector increased by 19.7% during August, but for fashion retailers the growth was more muted at 16.7%.
Sophie Michael, head of retail and wholesale at BDO, welcomed the improved performance, but said the figures should be taken in context.
“This increase is off the back of a 1.5% decline in 2016 and that figure was based on a drop of 4.3% in 2015, so August is still proving to be a challenging month for retailers,” she says, adding: “Stay-at-home holidaymakers and increasing numbers of tourists have made a positive difference to sales this month, but retailers would have wanted to make up more ground from the negative like-for-likes resulting in August in prior years.
Michael concludes: “As school terms begin after the summer break and the start of festive trading nears, retailers will be gearing up for their most critical trading months. The uncertain environment and fragile consumer sentiment requires all retailers to be ever more strategic with their pricing and promotional activities. Agility will be key to enable retailers to quickly adapt to consumer behaviours and product trends to attract their share of the falling discretionary spend.”