THE Royal wedding may have been good news for Britain’s tourism industry but it failed to lift the clouds from the nation’s high streets, according to a new study.
The study from BDO concluded that British retailers suffered their worst May in 12 years, underlining the changes in spending patterns that have contributed to a spate of store closures this year.
UK high street sales declined -2.2 per cent year-on-year in May, according to BDO’s monthly High Street Sales Tracker. It is eight months since in-store like-for-like sales have shown any real growth, BDO said.
Shops were “deserted” on Saturday May 19 as Britons chose to stay in and watch the marriage of Prince Harry and actress Meghan Markle, according to BDO.
While a recent British Retail Consortium survey concluded that sale values rose strongly in May, there are signs that a number of Britain’s big retailers are struggling.
On Thursday, House of Fraser said it needed to close 31 stores to survive, in a plan likely to result in as many as 6,000 job losses.
Retailers are shutting shops in the face of competition from online retailers such as Amazon. There has also been a squeeze on consumer budgets and a change in Britons’ spending habits away from fashion and towards holidays and entertainment.
Wage growth has started to outstrip inflation again, easing some of the strain for households, who have been hit by rising prices for much of the time since the June 2016 vote in favour of Brexit.
Sophie Michael, the head of retail and wholesale at BDO, said the figures highlighted the challenges on the UK’s high streets.
She added: “Consumer spending patterns continue to be both volatile and unpredictable, making it increasingly difficult for retailers to identify trends and respond accordingly.
“Whether it’s falling discretionary income, unexpected weather or a growing preference to spend on experiences, the result is creating growing challenges on the high street which are clearly affecting retail performance. The fashion sector saw moderate growth from a weak benchmark in May last year, but early signs for June are not promising. Fashion sales in the half-term week were down -7.8 per cent year-on year.”
While some commentators are reporting an increase in consumer spending, Ms Michael said this is not having an impact on discretionary goods sales. She said a rise in wages and lower inflation had only had a “notional” impact on the consumer purse.