British retailers had their biggest sales decline since 2008 last month, as wet weather kept shoppers at home and tourist spending slowed.
Comparable sales in stores dropped 4.3 per cent, falling a fourth consecutive month, business advisory firm BDO said in its monthly report. The decline was led by a 5.5-per-cent slump in sales at fashion retailers.
The figures make “sobering reading”, Nick Bubb, an independent retail analyst, said by email. BDO’s fashion survey only covered “relatively upmarket” retailers, and was not representative of the mass market, he said.
Despite a recovering economy, only 47 pence of every extra pound in the pockets of UK consumers is going through the tills of retailers, with an increasing amount being spent on leisure activities and holidays, Exane BNP Paribas said in a research note.
Next Plc, Dixons Carphone Plc, Sports Direct International Plc and Home Retail Group Plc are all scheduled to report results next week. Next's shares fell 3.6 per cent as of 1.04 p.m. in London on Friday, with Dixons Carphone shares down 2.9 per cent.
August Washout
The strength of sterling means that Britons are spending more on their holidays than at home. In the UK, the reverse is true, with the strength of the pound meaning that tourists have been more frugal, BDO said.
Summer rainfall levels in the UK were about 13 per cent more than the long-term average, the Met Office said, a factor that the management of Halfords Group Plc said was behind an 11-per-cent drop in cycling sales.
BDO’s monthly report covers the four weeks to 30 August, meaning that any extra consumer spending on the UK’s summer public holiday on 31 August will be reflected next month. The sales-tracker surveys about 85 mid-tier retailers and includes a total of about 10,000 individual stores.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.
