Homewares category makes ‘valiant recovery’ in July

Soaring temperatures failed to boost sales on the high street in July but resulted in the strongest online sales growth in 18 months, as consumers clicked for a fast-fashion summer wardrobe fix.

According to the High Street Sales Tracker (HSST), published today (Friday August 9) by accountancy and business advisory firm BDO, like-for-like in-store sales remained flat at +0.1% in July, ‘putting increased pressure on high street retailers heading deeper into Q3’.

BDO said: ‘Coming from a negative base of -1.1% for July last year, the results did not provide the boost that retailers needed after a tough first half of the year and with the all-important final quarter of the year looming on the horizon.

‘In-store lifestyle sales saw the worst July on record with like-for-like sales decreasing -3.0% from a poor base of -2.6% last year, indicating continued challenges for the category which has seen no growth for 18 months.

‘The in-store fashion sector toasted its first signs of growth in three months with like-for-like sales up +1.2% in July from a base of +1.3% for the same month last year.

‘Following a disastrous 2018, the homewares category made a valiant recovery with an increase of +5.8% but didn’t come close to offsetting last year’s negative base of -11.8%.

‘The silver lining to the bleak results on the high street was the strong performance of non-store, which saw like for like sales up +20.5% from a base of +14.7% last year – the strongest figures the category has seen since December 2017.

‘Perhaps too hot for high street shopping, the week-long July heatwave saw consumers jump online to freshen their summer wardrobes, ensuring a particularly strong performance for the non-store fashion category.’

Sophie Michael, head of retail and wholesale at BDO LLP, said: “2019 is proving to be a year to forget for the great British high street. Discounting has been relentless this summer. July’s flat sales figures will not only be disappointing for retailers but will also add further pressure to margins that are already being squeezed to the extreme.

“It is crucial the new Prime Minister delivers on his pledge to implement measures that will help save the high street and provide some much-needed reassurance to retailers and the hundreds of thousands of people they employ.”

Commenting on the future of retail, Sophie added: “Traditional brands are in a difficult situation but the high street is still a very important part of the future of UK retail. Boohoo’s acquisition of Karen Millen and Coast this week is indicative of that.

“While there will always be pureplay online retailers, we shouldn’t be surprised to see more moves like this, as online retailers turn to physical portfolios to create meaningful customer engagement.”

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