Yahoo Finance High street struggles as shoppers scale back in June
Retail sales volumes have come in well below inflation
UK are still holding back on the high street as sales remained well below inflation amid the current cost of living crisis.
Total like-for-like sales in June registered a modest growth of 1.9%, according to BDO’s latest High Street Sales Tracker. UK inflation is currently at 8.7%, well above the Bank of England's 2% target.
Sophie Michael, head of retail and wholesale at BDO, said: “The retail sector has recorded yet another month where sales volumes have come in well below inflation. Like-for-like sales growth has failed to exceed the rate of inflation every month since July 2022.
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“As the government attempts to reach its target of halving inflation by the end of the year with a continued cycle of interest rate rises, we expect to see discretionary spend and sales volumes fall even further as rate rises begin to take effect and more households are hit by significantly higher mortgage and rent payments. The competition for the consumer purse has never been more important.”
Homeware sectors were particularly hit by falling sales, with sales slipping 0.6% this month, after having also dropped 8.8% a year earlier.
In-store sales retreated 0.7% after already falling 1.9% in 2022, as the cost of living crisis pushes customers to cut back on spending on non-essentials like home improvements.
Sales across the fashion sector grew 3% in June, driven by a spike in in-store sales (7.2%), due to the increase in high street footfall during the warm weather.
Read more: Some retailers are overcharging customers, warns Bank of England
Michael also warned out that insolvencies in the retail sector have increased significantly, adding that the sector “is a vital cog in the UK’s economic engine. It is a major employer and requires urgent support to prevent further decline”.
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