Fashion sales have been hardest hit by the third consecutive May of negative high street sales, according to the latest figures released by accountancy and business advisory firm BDO.
According to BDO’s High Street Sales Tracker (HSST), UK retailers saw May’s overall like-for-like trading drop by -1.3%. The fashion sector saw year-on-year sales fall by -3.6% despite a low base of -1.9% in May 2016.
“Fashion sales were negative in the first three weeks of May, and the figures for the month make it the fourth of the year to see no in-store growth, suggesting a worrying downward spiral for clothing retailers,” said BDO in a statement.
Consumer spend is being squeezed due to rising inflation and low notional wage increases and that money which is being spent is being targeted to other areas, including leisure activities. Homewares retailers fared well in May with like-for-like growth of 1.2% off a strong base in 2016 but the leisure sector was the biggest winner with sales of lifestyle goods up 3.9% year-on-year, making it the sixth month of positive growth in a row for the sector.
BDO head of retail and wholesale Sophie Michael said retailers were facing “turbulent times” with higher operational costs, higher import prices and economic uncertainty, and needed to incentivise consumers to spend.
“Prolonged blanket discounting is not sustainable but shoppers need incentives to make the purchase. So it appears that most retailers have chosen to run targeted, short-term discounting in an attempt to ignite spending and protect further erosion to margins,” she said.
“Retailers should continue with targeted discounting but must also remain focused on product and quality whilst providing an enjoyable shopping experience to attract the customer back in store. They will be hoping for these turbulent times to calm and, once they do, the right strategies should pay dividends,” she added.