​Fashion sales strong in August but stock issues could halt recovery - BDO

By

Nigel TAYLOR

Published
Sep 3, 2021

It’s confirmed: August was a good month for UK retail, and particularly for fashion retailers. Following Springboard’s upbeat footfall report on Thursday, BDO’s figures on Friday were also positive.

But don’t get too excited. While it said retailers recorded “solid” August sales, the report also came with a warning that a “Covid-choked supply chain could lead to disrupted months ahead… threatening a sustained revival”.

But at least August marked six months of sustained retail recovery, boosted by online spending and buoyant consumer demand, the accountancy and business advisory firm said.

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Total like-for-like (LFL) sales, combined in-store and online, increased 20.1% last month from a base of -3.3% for the equivalent month last year.

“Persistent” growth across online channels (+20%) provided a firm foundation, although footfall struggled to rebound to the levels recorded two years ago, it noted.

Fashion and lifestyle sectors both led the way with positive total like-for-like sales in August, buoyed by the online shopping boom.

Fashion total like-for-like sales shot up by 27.6%, albeit from a base of -5.1% for August last year. Total like-for-like sales for fashion recorded consistent growth in each week of August, leading to the sixth consecutive month of positive total like-for-like sales for the sector.

There was a similar story for Lifestyle too with total life-for-like sales up 20.6% last month, but again from a base of -11% for the equivalent month last year. August marked the sixth straight month of positive like-for-like sales for total lifestyle aided by consistent online growth.

But Sophie Michael, head of Retail and Wholesale at the firm, cautioned: “Dwindling stock may cast a chill as the forthcoming golden quarter trading nears and supply chain disruptions begin to bite.”

She also warned that “growth rates are gradually slowing, with one reason potentially being that retail spending is starting to level-off following the post-lockdown surge in consumer demand. With continued supply chain pressures, spurred by labour shortages and the Delta variant, potential challenges lie ahead.

“There is the risk that ongoing disruption and growing costs for retailers could lead to higher prices and fewer choices for shoppers in the lead-up to Christmas. It may seem like a distant concern, but with logistics experts suggesting that some issues are unlikely to be resolved until early 2022, the next couple of months will require careful planning by retailers and could prove to be crucial in order to avoid Christmas woes.”