Retailers continued to show signs of struggling in June, new figures show, as sales growth remained well below inflation due to customers scaling back their shopping habits due to the cost of living crisis.
Total like-for-like sales in June grew 1.9 per cent from last year’s base of 8.4 per cent, according to figures from accountancy firm BDO, the sales growth remained below inflation, which has sat at 8.7 per cent since April.
“The retail sector has recorded yet another month where sales volumes have come in well below inflation,” Sophie Michael, head of Retail and Wholesale at BDO LLP, said.
“Like-for-like sales growth has failed to exceed the rate of inflation every month since July 2022.”
Homeware sectors appeared to be hit hardest by falling sales, with sales falling 0.6 per cent this month from a negative base of -8.8 per cent for the same month last year.
In-store sales also performed particularly poorly, falling 0.7 per cent from a base of -1.9 per cent in 2022, as high living costs has led customers to cut back on splurging on home improvements.
Total LFLs across the fashion sector grew just 3.0 per cent in June, buoyed by a 7.2 per cent spike in in-store sales due to the increase in high street footfall during the warm weather.
“Reports of insolvencies in the retail sector have increased significantly recently, which reflects the severity of the situation,” Michael added.
“The retail sector is a vital cog in the UK’s economic engine. It is a major employer and requires urgent support to prevent further decline.”
It’s the latest in the series of damning reports which show the impact of high inflation on retailers.
It’s the highest level in nearly a decade, with some 1,942 retailers going bust in 2022/23, up from 1,243 in 2021/22 – surpassing pandemic levels when shoppers were prohibited from hitting the high street.