The fashion industry in the UK faced a challenging time in August as shoppers shifted away from traditional brick-and-mortar stores. BDO’s High Street Sales Tracker (HSST) revealed a stark drop in sales, with the month marking one of the toughest periods for the high street in recent memory. Specifically, the fashion sector saw its poorest August performance since 2015, with a notable decline of over 3% in in-store sales over a three-week period.
Overall, high-street sales across various sectors experienced a 2.7% decrease in August, continuing a downward trend for the seventh consecutive month in terms of like-for-like sales. Retailers have not witnessed a 1% rise in like-for-like sales for nearly a year, underscoring the ongoing challenges faced by the industry.
Although fashion did not rank as the worst-performing sector in August, homewares stores suffered a substantial 6.1% decline in year-on-year sales. On the other hand, lifestyle stores managed to maintain a steady growth rate of 0%, avoiding a dip in sales.
Contrastingly, online sales saw a significant 13.7% surge compared to the previous year, although BDO labeled this growth as lackluster. This trend marked the lowest August result since 2015 and the third lowest result for 2018.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, highlighted that the high street has been struggling to achieve meaningful growth since the prior October. Factors like inflation and the recent heatwave have affected consumer spending, diverting individuals towards alternative leisure activities. Despite these challenges, retailers have been able to safeguard their margins through enhanced stock management practices and reduced discounting periods.
As the holiday season winds down and consumers return to their regular routines, the upcoming weeks will prove crucial for retailers heading into the final quarter of the year. Michael emphasized that even amidst consumer caution, there will be winners and losers in the retail landscape. The ability to adapt to evolving consumer behaviors and uphold a successful business model will determine which retailers emerge victorious in the competitive market landscape.
For more information on the current state of the UK fashion industry and retail sector, you can visit Retail Gazette and Drapers Online.
