Cost of living crisis hits at retail sales figures
The cost of living crisis has held retail sales growth at their lowest rate for nearly 18 months, new figures show.
Total like-for-like sales in June increased by 8.4% compared with a year ago, but an 8.8% drop in homeware sales suggested consumers are postponing large purchases, according to the BDO High Street Sales Tracker.
The data shows that the fashion sector continued to outperform the lifestyle and homeware sectors – recording total sales growth of 15.2% –the 16th consecutive month of positive figures.
In contrast, lifestyle sales fell for the eighth consecutive month, sparking concerns that consumers are reducing their discretionary spending.
Sophie Michael, head of retail at BDO, said: "These 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.
"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.”
The BDO figures follow earlier data which shows the number of people using shops fell by 10.5%.
Footfall on high streets was down 13.9% on June 2019, while shopping centre visits were down 24.1%.
BRC chief executive Helen Dickinson said: "Rising inflation, particularly soaring energy costs, is limiting the spending power of customers and damaging consumer confidence.”