Retailers recorded total like-for-like sales growth of just +0.2% across discretionary categories in September, with this low level of growth comparing to an already very weak base in September 2022, according to accountancy and business advisory firm, BDO LLP.
BDO’s latest High Street Sales Tracker shows that despite in-store LFL sales growing by +1.0% compared to September 2022, online sales grew just +0.1%, demonstrating a weak performance overall. This is the 14th month in a row that sales growth has been lower than the rate of inflation, meaning that sales volumes have continued to decline each month, painting a gloomy outlook for retailers.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “Despite people returning from summer holidays and school terms commencing, September was a very poor month for the retail sector. Sales growth has flat-lined in categories like fashion and homewares, and such minimal growth in a high-inflation environment means that sales volumes of discretionary goods have shrunk.
“The context of these results, comparing back to September 2022, is really important, we saw very weak sales growth in that period amid the economic uncertainty prompted by the Government’s ‘mini budget’. Performing so poorly against such a weak base will be really worrying for retailers.”
The fashion sector saw sales fall by -3.4%, compared to +6.7% growth in September 2022. This poor performance was largely driven by in-store sales declining by -5.0%. The homewares sector continued its poor performance with growth of just +0.2%, which failed to offset a very low base in 2022 of -6.3%.
The lifestyle sector emerged as the only winner from September’s results, with sales up +4.8% from a base of +1.2% in September 2022. In-store sales were particularly strong, growing by +7.4% compared to the same period last year.
Michael continued: “The unseasonably warm weather in September may have been welcomed by some, but the ongoing impacts of climate change on our seasons can’t be ignored by the sector. Retailers must be agile and adaptable, particularly in this challenging environment; to succeed, they have to return to the key fundamental of ensuring that their product offering is relevant and topical to entice their customer to buy.
“For so long we’ve been highlighting the competition for the consumer purse. As we enter the golden quarter, with fuel prices rising and higher food prices seemingly here to stay, it’s never been more important for retailers to truly understand their customers needs in order to retain and grow their share of the consumer purse.”