The UK’s decision to leave the EU in last month’s referendum vote had an immediate impact on the high street, according to figures released by BDO LLP.
Accountancy and business advisory firm BDO LLP’s monthly high street sales tracker recorded a -3.6% fall in overall year-on-year sales for June, making it the worst June in over a decade.
BDO said a strong start to June saw overall sales grow 3.8% year-on-year in the first week, but the ‘Brexit effect’ hit retailers with increasing severity as the month wore on. Sales reversed to a -3.1% drop in the second week and by the final week of June – two days after the ‘leave’ campaign declared victory – overall year-on-year sales had plummeted -8.1%.
June’s results make it the fifth month in a row that the UK’s high streets have seen negative growth, claimed BDO. It was also the first time in almost a year that all three sectors – lifestyle, fashion and homewares – recorded negative growth in the same month.
Sales of lifestyle goods for the month were down -0.2% compared to June 2015 and fashion dropped to -4.9% – the sector’s second lowest monthly figure so far this year. Sales of homewares were down -6% year-on-year and non-store sales rose just 15.8%.
Sophie Michael, head of retail and wholesale at BDO LLP, said: “Many retailers may have hedged against the falling pound for the short term, but if sterling stays at these levels, the cost of importing goods and further erosion to margin may need to be passed onto the consumer.
“It is even more important now for retailers to focus on their product offering and service. While reports suggest that average income has reached a historic high, the challenge for retailers is to convince consumers to spend their surplus income with them, amid the temptation of a post-Brexit spending paralysis.”