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LONDON (Alliance News) - The BDO High Street Sales Tracker survey for August on Friday showed the UK high street had its worst month since November 2008, with sales declining year-on-year as consumers decided to desert the high street in favour of taking holidays abroad.
The survey, published by accountancy BDO, showed UK high street sales were down by 4.3% in August, the worst performance for the sector since the financial crisis in 2008 and the fourth consecutive month of like-for-like declines. It is the first time figures for May to September have been consistently negative since 2009, BDO said.
BDO said that, with the exception of the last week of the month, consumers deserted the high street in favour of spending their money on holidays abroad. It said surveys published in the past month have indicated increased spending on leisure activities, with Gatwick Airport reporting its busiest August bank holiday weekend in history.
Further evidence of this trend emerged on Thursday, when budget airline easyJet PLC upgraded its profit guidance for the full year following a record August for passenger numbers and its load factor.
BDO added the strength of the pound is proving "somewhat detrimental" to the revenue of high street retailers, with consumers spending more on items abroad in order to take advantage of beneficial interest rates, while tourists, particularly those travelling to the UK from the eurozone, are less willing to spend, due to their weaker currencies. In addition, BDO said the ongoing political and macroeconomic uncertainty, coupled with the potential for a UK interest rate rise in mid-2016, is weighing on consumer sentiment.
The accountancy also said consumers remain selective about their spending, with specialist fashion retailers and small-ticket giftware companies having generated relatively strong like-for-like sales growth through the month, but furniture and premium lifestyle brands struggling to turn reasonable footfall into sales.
Outdoor goods retailers also struggled due to the relatively poor weather over the month and due to increasing competition. That was evidence in the trading update from Halfords Group PLC, the bicycles and car parts retailer, which on Wednesday said it has seen a sharp slowdown in cycling sales in the second quarter.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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