High street sales fall for first time in over two years

UK high street sales declined in May 2023 for the first time in 26 months, according to the latest BDO High Street Tracker.

Like-for-like (LFL) sales on British high streets fell by 1.5%, following on from a 14% increase for the same month in 2022.

In-store sales increased by 1%, up from last year’s base increase of 26.3%. However non-store sales dipped by 3.3%, following on from two consecutive months of growth. This was down against last year’s base increase of 4.9%.

Despite a fall in inflation, LfL sales remain below price growth.

The report found that total LfL sales were generally low in May, which was affected by an additional bank holiday due to King Charles III’s coronation. The additional two holidays may have contributed to lower spending as consumers prioritised holiday or experiential spending over general high street retail.

General views towards spending may also have contributed, with inflation remaining abnormally high. Inflation grew by 8.7% in the 12 months to April, which was higher than expected.

However, footfall increased during May, exceeding 3% in every week except the second, likely due to festivities surrounding the Coronation Weekend. The final week produced the strongest footfall figures, which was up by 5.5%, driven by an increase in high street traffic of 8.6% year-on-year.

Sophie Michael, head of retail and wholesale at BDO LLP, said: “These results are extremely discouraging.

“Like-for-likes are an absolute value and therefore, given the high inflation rates, these figures suggest significant drops in volumes.

“With three bank holidays last month and the fact that footfall has increased compared to this time last year, these results highlight the huge pressure on the consumer purse.

“The drop in online sales is also stark, recording the worst online sales results on record with the exception of the months impacted by the COVID-19 pandemic.”