The report found that total like-for-like sales increased by 8.4 per cent compared to June 2021 and homeware sales fell 8.8 per cent signalling consumers are postponing large purchases.
Meanwhile, online sales also recorded disappointing growth as high levels of inflation and the deepening cost-of-living crisis prompt further slowing of retail sales growth.
The tracker also found that total non-store LFL sales remained relatively flat at just +1.6 per cent in June. While this is the online retail sector’s third consecutive positive result, it is a disappointing performance given it is based on low growth of +8.2 per cent in June 2021.
According to the data, June started particularly slowly, as total LFL sales grew by just +4.65 per cent in the first week of June, which included the Platinum Jubilee bank holiday. Total LFLs increased by +7.63 per cent in the second week of June, and +7.30 per cent in the third week, compared to the same week in 2021.
The final week of the month saw the strongest LFL growth, with sales jumping by +18.61 per cent above those recorded in 2021.
Despite its slow start to the month, the fashion sector continued to outperform the lifestyle and homewares sectors, recording total LFL sales growth of +15.2 per cent, compared to a base of +73.7 per cent in June 2021. This is the 16th consecutive month of positive like-for-like sales.
Total LFL sales in the lifestyle sector increased by +6.9 per cent in June, up from a base of 50.9 per cent in June 2021. In contrast, lifestyle LFL sales through online channels have fallen for eight consecutive months that may spark concerns that consumers are reducing their discretionary spending in the sector.
Sophie Michael, head of retail and wholesale at BDO LLP, said the results confirm that the outlook for retailers is of concern.
“With consumer confidence at historically low levels, real wages falling to a 20-year low and interest rates set to rise further, there are few signs of encouragement for retailers,” she said.
“The fashion sector has undoubtedly been boosted by consumers refreshing their wardrobes for summer holidays. However, the weak sales growth for online retailers and the negative results for the homewares sector are key indicators that consumers are tightening their purse strings on discretionary spend and in particular on big ticket items.
“Retailers who have accumulated high levels of stock are now faced with a real challenge: with their own cost base rising, they cannot afford to discount it to increase sales, but neither can they afford to sit on unsold product. Effective management of stock levels and working capital will be essential for retailers to trade successfully through this period of unprecedented challenge.
“Ultimately, however, retailers will be looking to the government to use the levers at its disposal to get inflation under control, ease the cost-of-living crisis and create the economic conditions where the retail sector can flourish.”
