Year-on-year sales up for June, but months ahead will ‘test resilience of retailers’

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Accountancy firm BDO has released its latest High Street Sales Tracker, with figures for June seeing a year-on-year increase, with weather helping to boost traffic.

The BDO High Street Sales Tracker outlines the weekly sales changes of more than 70 mid market retailers with some 10,000 individual stores, mainly located on high streets throughout the UK.

Total like-for-like sales were up by +1.3% in June off of a negative base of -3.6% for the same month last year.

BDO national head of retail and wholesale Sophie Michael commented: “This was the best June since 2011 and the second best monthly result of 2017 to-date. However, the result was coming off of a poor base, as June 2016 was the worst June in more than a decade.

“The same month last year incorporated the day of the EU referendum when all eyes were focused on the Brexit vote. A year on, sales have improved from that time.”

June began with total sales up by +3.8% in week one as good weather and half term holidays in many areas boosted sales. In week two total sales crashed to -5.18% as unsettled weather during the General Election week deterred spending. The negative effect rolled over into week three, when good weather, upbeat footfall and Father’s Day did not translate into positive sales with the week ending at -1.71%. However, in week four, the week comparing to the week of the EU referendum last year, sales roared back to +7.99% amid sustained warm weather.

Overall footfall was up in every week of June except for the week of the General Election (-2.1%). The high street also only saw footfall decline in the week when voters went to the ballot boxes (-3.3%), rebounding strongly in week four with footfall up by +4.4% compared to the same week a year earlier. Retail parks saw footfall increase in every week of the month, with the high of +4.9% coming in week four. Footfall at shopping centres was up in weeks one and four, but down in the two weeks in the middle of the month, with the low of -1.8% coming in week two.

“While sales have improved on a dismal June last year, it will be the months ahead that will really test the resilience of retailers,” continued Sophie. “The Confederation of British Industry (CBI) reported in June that its monthly retail sales balance showed that retailers are the most downbeat about the month ahead (July) since September last year. As inflation continues to rise against stagnating wage growth, it will be imperative for retailers to maximise the opportunities that the summer brings, and walk the increasingly fine line of balancing discounting with margin squeeze.”

Fujitsu UK and Ireland director for retail and hospitality Heather Barson commented on the report.

“After four months of no growth, it’s encouraging to see sales up in June, giving the high-street a much needed revival,” she said. “This boost in sales highlights how simple factors such as weather can affect sales. With fashion sales advancing in June, is likely that because it has now begun to feel like summer, consumers have been happier to spend money updating their summer wardrobes.

“According to our research, 75% of consumers don’t have any real loyalty to high street retailers, as they will shop with whoever offers the items they need. As such, it has never been more important for retailers to be able to cater to the needs and desires of consumers, or else they will lose them to another retailer who does. Retailers should be harnessing data in order to take this proactive approach, so that they can predict consumer behaviour and include factors such as weather, regional events and other dynamics that influence when customers will be in store and what products they are most likely to want to buy. If they can predict and plan for these points then they can ensure they maximise consumer demand and improve sales even more, and make the shopping experience easier and more enjoyable.”

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