UK retail sales weak in July, but online booms, especially fashion – BDO

Physical store sales in discretionary categories were up just 0.8% last month although online sales rose a healthy 8.3% year on year, the latest High Street Sales Tracker from accountancy and business advisory firm BDO showed on Friday.

And total like-for-like retail sales (combining in-store and online) grew by just 2.8% in July, compared to a base of +3% in July 2024.

The anaemic rise in physical stores was significantly below inflation and meant yet another reduction in volumes. It was the seventh consecutive month of lower in-store sales, “reflecting the sector’s ongoing struggle to get shoppers out onto the high street and spending money”.

And BDO said the fashion sector showed the most extreme gulf between in-store and online with the former up just 1.3% while the latter rose 10.1%. But on the plus side, at least sales in the fashion category were higher than the total figures, regardless of whether they happened physically or virtually.

Sophie Michael, Head of Retail and Wholesale at BDO, said: “Consumers are under huge pressure. Food inflation remains stubbornly high and this is leaving shoppers with very little disposable income for non-essential spend.

“We naturally expect retail sales to be challenging during the school holidays as families fly overseas and prioritise disposable income in spending on experiences and social activities. But this month’s figures point both to a longer-term trend – the strengthening of online retail’s supremacy over the high street – and the economic challenges the UK is facing.”

BDO also said the growth in online sales “demonstrates that easy access to the best deals or a product range that hits the moment just right can encourage consumers to spend. Bricks-and-mortar stores struggle to match this agility and continue to find it much harder to respond to trends or quickly pivot to changes in consumer preferences”.