It’s bad news for the British high street. New figues reveal the worst August performance for three years, in further evidence of the pressure on traditional retailers.
As the abundance of online surges, shoppers are no longer traipsing out and going to physical stores.
According to the latest data from the advisory firm BDO, which monitors mid-sized, non-food chain, stores sales slid 2.7% last month, compared with August 2017, with homewares and fashion taking the biggest hit.
Commenting on this, Sophie Michael, BDO’s head of retail and wholesale said: “With inflation continuing to bite on the weekly shop and the heatwave driving discretionary spending to bars and entertaining, there is even less disposable income heading to the high street.”
Rising interest rates and subdued wage growth meant there was little spare money to spend on fashion or expensive homewares, contributing to declines in underlying sales of 3.6% and 6.1% for those sectors respectively.
August was the seventh month in a row for sales to drop, according to BDO, with no boost from an apparent trend towards staycations.
But this doesn’t mean people aren’t spending, as there has been a 13.7% rise in online sales in August (BDO).
This news will send shivers down town centres spines, which have already been hit by a wave of retail closures this year.
Michael said there were signs that retailers had protected their profit margins by keeping stocks tight. However, the troubles of major chains, including House of Fraser and Debenhams, have spawned discounting across the market.
Currently the future of the High Street doesn’t look to bright, with stores also opening at their lowest level in seven years, research reveals.
Figures from the Local Data Company (LDC) show that store openings have fell by 10 per cent since 2010, during 2017 there was only 4,083 High Street startups.
Lisa Hooker at PwC, who commissioned the research said:”We saw volatility from month to month and across different sectors as wage growth failed to keep up with inflation, forcing many shoppers to think more carefully about their spending habits.”
“On top of this, many retailers are increasingly feeling the impact of the acceleration of online shopping as consumers begin to feel more comfortable with the price transparency and reliability of delivery options offered by online players.”
Mobile apps have been instrumental in the rise of online shopping.
Smartphones have moved from being useful to becoming essential. Many rely on the convenience of this technology to get through all aspects of their daily routine.
Businesses have noticed this trend and, in order to stay relevant, have developed apps to meet customers demands and match their fast-paced lifestyles. However, as a result, some physical businesses are suffering.
Mobile banking, movie streaming services and food ordering have all amounted to less people spending time and money on our high streets.
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