BDO Data Shows Retail Sales Struggled In April

• Total LFL sales grew by +3.7% in April, from a flat base of +0.4% in April 2024
• Online sales drove growth, increasing by +5.6%
• However, in-store sales recorded below-inflation growth of +2.3%
• High street risks being “hollowed out” as consumers shift shopping online

Total retail sales in discretionary spend categories grew by +3.7% in April, driven primarily by growth in online sales, as bricks and mortar stores suffered another challenging month, according to BDO’s latest High Street Sales Tracker. 

The latest report from accountancy and business advisory firm BDO shows that retailers continue to struggle to drive consumer spending on the high street, with sales in-store increasing just +2.3%, compared to a negative base in April 2024 of -1.7%. Not only does this mean that in-store sales have barely recovered from last year’s poor performance, but it also means that actual sales volumes shrank, as this is once again below the rate of inflation.

The lifestyle and homewares sectors recorded particularly poor performances in-store. In-store sales declined -1.2% in the lifestyle sector, with in-store sales in the homeware category growing just +0.9% compared to a negative base of -1.5% in the same month last year. 

The warm weather during April provided a boost for fashion sales but stores still struggled to capitalise on this. Sales in-store grew by +5.2%, but this is against a base of -8.3% in April 2024, meaning that the category has failed to recover from this poor performance. 

Sophie Michael, Head of Retail and Wholesale at BDO, commented: “While April’s results may initially appear positive, it was a month boosted by warm weather and seasonal events such as Easter and school holidays, which typically help to drive consumer spending. It’s clear that there is a cloud of uncertainty around economic issues such as the introduction of trade tariffs and cost increases, which has had a material knock-on effect on consumer confidence and their willingness to spend. 

“When household finances are under pressure, consumers will understandably reduce their spending in discretionary categories like homewares and lifestyle and prioritise spending on experiences with family and friends.

“While online retailers are still managing to record sales growth, high street stores are really struggling to get shoppers through the door.

“The high street is at real risk of being hollowed out if retailers can’t find a way to entice shoppers back into stores. Alongside the squeeze on the consumer purse, there has been a shift in purchasing behaviour and there is increasing competition for discretionary spend. Retailers need to look at how they invest in new tactics – for example embracing trends like the growth of pre-loved fashion and the circular economy – and operate with agility, scaling the initiatives that work and learning from those that don’t. 

“While some trends may appear as a real threat to traditional retailers, their pace of growth means that retailers need to explore adopting activities which complement such trends to enable them to successfully navigate this shift in consumer behaviour.”

Source : BDO

Image : William Barton / iStock / 838851246

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