August continued the positive discretionary retail sales story, fashion led the way says BDO

On Friday, the UK’s official statistics body released figures for July total retail sales. But on the same day, the latest High Street Sales Tracker from accountancy and business advisory firm BDO gave us some more up to date clues with its August discretionary retail sales report.

And what did it say? Total like-for-like discretionary retail sales (in-store and online combined) grew by 3.9% last month. That was above inflation for the very first time this year, indicating that volumes have also increased. And high street stores alone recorded strong sales growth of 5.2%. That was the highest growth on the high street since August 2023.

The discretionary categories BDO tracks include fashion, homewares and lifestyle, and their 3.9% jump compared strongly to the 0.7% dip this time last year.

Total like-for-like retail sales in fashion led the way and grew by 4.4%, with in-store sales growing in the fashion sector by 5.8%.

As well as physical stores doing well this time, online retail continued the strong performance it has recorded throughout this year, with sales increasing by 6.6% compared to the same month last year.

Sophie Michael, head of retail and wholesale at BDO, said: “Retailers have been under huge pressure this year, particularly on the high street, so these results will make very welcome reading for the sector. Given the disappointing performance of bricks-and-mortar stores this year, the strong growth of in-store sales during August is a very encouraging sign for retailers as we head into the crucial pre-Christmas trading period. However, it is likely that some of this growth was driven by heavy discounting and promotions, as retailers focused on clearing their stock ahead of the autumn season.”

She added that while the approach may well have boosted sales in the short term, it inevitably impacts profits “and will certainly not be sustainable when we hit the ‘Golden Quarter’ in the run-up to Christmas. With retailers’ cost bases higher than ever, thanks in part to changes to National Insurance contributions, maintaining margins is vital”.

Michael thinks that for many retailers, continuing discounting to drive revenue “simply won’t be an option. The good weather for much of August undoubtedly helped get more shoppers out onto the high street. However, as we get into autumn and the weather worsens, retailers may struggle to attract the same level of footfall”.