June sees retail sales return to growth, but high street sales lag behind

Total in-store and online retail sales grew by +3.2% in June, marking the strongest sales growth since August 2023, according to new data from BDO’s High Street Sales Tracker.

This is the second successive positive month for total retail sales, following five months of negative results.

However, BDO’s data, which analyses sales across discretionary spend categories, highlights that this growth was primarily driven by online sales, which grew +9.8%, as in-store sales recorded a poor performance of just +1.8%.

Sophie Michael, Head of Retail and Wholesale at BDO, said, “Despite strong growth in online sales, the performance on the high street continues to be very disappointing.

The latter half of the month saw much warmer weather, but this failed to drive footfall onto the high street and into stores. Retailers will be focused on finding actions that they can take to   encourage consumers back in-store and increase sales”.

High street sales in the fashion sector declined again in June, recording a tenth successive month of negative sales figures, down -6.7% compared to the same month last year. This is in stark contrast to online sales, which increased by +9.9%, emphasising further the poor performance of the sector’s high street stores.

The homewares sector grew for the second successive month, despite online sales falling by -8.3%. Its relatively positive in-store performance meant that total sales managed to grow by +3.0%.

Overall sales in the lifestyle sector has remained positive throughout 2024, and total sales grew by +7.5% in June, with a positive result both across in-store and online.

Michael added, “After a prolonged period of negative results, the retail sector is finally starting to see an uptick in sales growth, perhaps in part due to inflation easing with consumers feeing more confident.

“However, the results continue to be volatile both across product mix and channels, which makes it very challenging for retailers to invest upfront when buying inventory and decide which promotional activity will be most effective, thereby bringing further challenges to an already stretched bottom line.

“Fashion retailers will be particularly concerned that they have now recorded negative sales on the high street for 10 months in a row. The new government has pledged to breathe new life into Britain’s high streets, with a five-point plan for bringing consumers back into town and city centres. For the UK’s struggling retail sector, this rejuvenation plan cannot come quickly enough.”