High street retailers call for more support amid difficult trading conditions

Next week’s Budget comes at a crucial time for retailers, particularly those with bricks and mortar stores. We are now one month into the so-called ‘Golden Quarter’, the most important time of year for the sector.

?

“BDO’s High Street Sales Tracker, which tracks monthly discretionary spend compared to the previous year, has shown that in-store sales have been negative or grown by less than 2% every month since the start of the year, a bleak picture if we take inflation into account.

?

“So far, 2024 has been an incredibly testing time for retailers, as it appears the novelty of being able to shop in-store again post-pandemic has worn off for consumers. Those in the discretionary spend categories have not only had to deal with increased operational costs but also a tightening consumer purse and increased competition from spending on travel and experiences.

?

“Whilst online sales have remained more resilient than in-store, the lack of growth on the high street continues to be of concern, with many retailers introducing more substantial discounting in a desperate attempt to increase sales, impacting already squeezed margins.

?

“In addition to challenges around consumer spending, our latest survey of mid-sized businesses revealed that retailers are reporting ongoing supply chain disruption, workforce pressures and challenges accessing new finance, meaning cash flow could be a serious issue coming into the Christmas period.

?

“The Chancellor has already committed to publishing a new ‘tax roadmap’ at the Budget, giving businesses some much needed certainty. Business rates are set to rise considerably from April next year, with? more than a quarter (27%) of retailers survey wanting to see business rate reform prioritised as part of the roadmap.

?

“The sector is crying out for some support and our high street is at risk of becoming a very expensive ‘window shop’ for online purchases. These businesses contribute to both the national and, crucially, local economies throughout the UK, employing almost 3.5 million people. The relentless headwinds they are facing should not be underestimated.

?

Visit https://www.bdo.co.uk/en-gb/insights/industries/retail-and-wholesale/high-street-sales-tracker for our latest High Street Sales Tracker report.

?