LONDON — Brits are spending less and less on fashion, according to accountant BDO’s latest High Street sales tracker.
BDO’s monitor for May, released on Friday, shows that fashion sales fell by 3.9%. Total High Street sales were down by 1.3%. Footfall — the number of people actually going to High Streets up and down the country — also fell.
“Fashion has posted negative monthly like-for-like sales in four out of the five months for the year-to-date,” BDO says in the report. “Sales were negative in the first three weeks of May, before bouncing into positive territory with the better weather in the last week of the month, but off of a poor base last year.”
May is not a blip either. Fashion sales on the High Street have recorded only three months of growth in the last year and a half, according to BDO’s tracker.
A shift to online appears to be partly to blame for the declining sales. Non-store sales rose by 19.3% in May, suggesting more people are buying clothing and shoes online rather than in-store.
However, BDO notes that the 19.3% growth is in fact “the second lowest for non-store sales in the first five months of the year-to-date.”
The report says: “The decline in footfall and the marked slowdown in non-store sales for the first three weeks of the month, points to a real slowdown in consumer spending on retail in May. The depleted spending levels come off the back of a rise in inflation of 2.7% in April, its highest level since September 2013.”
BDO predicts more spending declines on the way, with the Bank of England forecasting that inflation will peak at close to 3% later this year.
High Street retailers are already starting to feel the pain. Retail stalwart Next suffered its first fall in profits since the recession in 2016/17, down 3.8% to £790.2 million in the year to January 1. The company’s share price collapsed 14% when it warned at the start of the year that profits were likely to fall.
Earlier this year, UBS said it found a “dramatic reduction in consumer discretionary income and intention to spend,” and predicted that clothing retailers would be the worst hit.
GfK’s survey of consumer confidence in May found an improvement among shoppers, but the balance is still negative at -5.