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High street sales growth continued to lag behind inflation in June, as shoppers turned to online retailers, according to new data from BDO.
The firm’s latest High Street Sales Tracker showed like-for-like in-store sales in discretionary categories – fashion, homewares and lifestyle – rose by just 0.6% compared to June 2024, marking the sixth consecutive month of below-inflation growth.
However, online sales grew 4.3% over the same period. Fashion retailers in particular saw a stark contrast, with online sales up 10% while in-store sales fell 0.2%.
Data from the Confederation of British Industry (CBI) suggested this was also the ninth consecutive month of falling overall sales volumes across the retail sector, underscoring the ongoing challenge of attracting consumer spending.
Sophie Michael, head of retail and wholesale at BDO, said: “Consumer spending continues to be challenged, with little optimism for retailers. We know that consumers are being incredibly cautious when it comes to discretionary spend, given the significant noise around rising job losses and volatility in the geopolitical landscape.
“There is also a growing gap between the performance of physical stores and online retail. Perhaps this is because online retailers have greater agility to adjust their inventory and promotional material to quickly align to consumer preferences, such as promoting summer outfits in extreme high temperatures and pivoting to waterproofs when the rain arrives.”
She added: “Store propositions need to be reinvented. Strategic and targeted investment is what is really required for retailers with a significant physical footprint to remain competitive. At the same time, retailers need to continue to invest in blending their physical and online offerings. Without this investment and local government support, we risk seeing further store closures which has a detrimental effect on our towns and communities.”
