UK high street sees worst half year in a decade

The high street has experienced the worst first half to a year in more than a decade, as sales dropped for a fifth consecutive month, according to the BDO High Street Sales Tracker.

Retail sales fell 1.7 percent in June according to the Tracker, marking the first time in 12 years that in-store growth had not seen growth over 1 percent for six months in a row.

In an article published in the Guardian last week, the broadsheet states the current high street has seen "the highest rate of retail failures and store closures since the financial crisis was recorded in the first six months of 2018 and there is no sign of a let up as consumers rein in spending on clothing and household goods and, when they do spend, increasingly shop online."

The news comes as retail expert and author of Vanishing the High Street Bill Grimsey states brick and mortar stores are no longer the cornerstones of the UK high street. In a review led by Grimsey, the takeaway for the evolution of high streets is that they must become community hubs that include housing, office and some shops.

There is too much retail space in the UK

Grimsey said it was "time to accept that there was already too much retail space in the UK and town centres needed to be “repopulated and re-fashioned” with libraries and public spaces at the heart of each community."

“The bleak and crippling start to the year shows no sign of abating, with deep discounting set to eat into (profit) margins that are already being stretched paper-thin by poor sales and rising costs, including the much-discussed issue of unfair business rates on high street retailers,” BDO head of retail Sophie Michael said in a press release.

According to the weekly tracker, like for like sales in fashion were down by -2.3 percent in-store this month from a base of 1.4 percent for June last year. While fashion saw in-store growth of 0.4 percent last month (May), growth of 1 percent or above has eluded the sector for the past nine months. With some evidence of summer discounting, LFLs were up in the middle of June, with a high of 4.55 percent bouncing off of a poor General Election week the year before. However, the month was topped-and-tailed by declines in excess of 7 percent in weeks one and four. The poor results effectively ended any hope of an overall in-store increase for fashion this month.

The BDO High Street Sales Tracker outlines the weekly sales changes of more than 70 mid market retailers with some 10,000 individual stores. These are mainly located on high streets throughout the UK. As such it provides a very good indication of underlying trading conditions without the distorting effect of large grocery based retailers, as well as changes in retail capacity.

The results are closely followed by industry and city analysts, while retailers use the results to benchmark performance.

Photo credit:New West End Company London Oxford Circus

 

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