The recession remains fresh in the minds of high street retailers, and the recent stagnation of sales has proved worrying for many. However, July saw a comfortable bounce back with the BDO’s monthly High Street Sales Tracker recording a 1.7 per cent like for like sales lift when compared to the previous year.
Warm weather and a growth in click and collect services saw consumers taking to the high street once again, with retailers of home wares and lifestyle products enjoying a like for like increase of 10.8 per cent and 5.5 per cent respectively. Unfortunately, a summer increase in fashion sales failed to materialise, with this sector seeing a drop of 0.7 per cent in like for like sales.
Although this may seem disappointing, clothing retailers need not be overly worried as the drop could be down to seasonal distortions – fashion brands have already begun to discount summer lines early as they prepare for autumn and winter lines to hit the shelves. Overall, then, the news coming from the high street is extremely positive, especially as next month will mark the first full six months of positive year on year growth in four years if the current conditions continue.
Head of retail and wholesale at BDO, Sophie Bevan, points out that like for like figures do not necessarily “tell the whole story.”
She explains; “The bigger picture shows that retailers are holding their resolve and responding to the upturn on the high street – and are confident that shoppers are more willing to pay full price for the right products.
“This results in seasonal discounting being increasingly selective and planned.
“While in some areas we may be seeing less sales volume, improving margins supports long term sustainable growth for retailers.”
Yet despite this strong vote of confidence by BDO, a report from Deloitte has underlined exactly how challenging trading remains to be on the high street. It found that chain retailers closed an average of 20 shops per day in 2012 and forecasts that this trend will continue to a lesser degree, with four in ten high street shops expected to close in the next five years.
This is disappointing news for town centres and will add weight to the arguments of those, like Bill Grimsey, calling for more diverse uses of high street retail property.
Ms Bevan remains adamant that retailers are remaining positive despite the ongoing difficulties, saying; “There will always be ups and downs on the high street, which is sensitive to subtle changes.
“While fashion dips, home ware and lifestyle sales rise – showing that all retailers are playing the long game and the underlying sentiment is one of confidence and profitability.”
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