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UK Apparel Sector Weathers Seasonal Discounts

New numbers collected by BDO’s monthly High Street Sales Tracker indicate that UK fashion retailers continue to be in recovery. While homewares and lifestyle retailers saw strong sales for the month of July, apparel felt the affects of planned seasonal discounting. Despite a promising 3.75% spike at the start of the month, like-for-like fashion sales decreased 0.7%.

In total, clothing and footwear prices dropped 1 percent in July, following a 3.3% decrease in June. In a separate report, the BRC Nielsen Shop Price Index noted that shop prices deflated for a record 15th consecutive month in July, with menswear and childrenswear taking a particularly hard hit by discounts. Meanwhile, footwear, women’s fashion and baby apparel registered a lower deflation rate than the category average.

While fashion sales and prices dipped, homeware and lifestyle sales grew 10.8% and 5.5% respectively, indicating that retailers are “playing the long game and the underlying sentiment is one of confidence and profitability,” the BDO reported. Online sales continued to perform well, with sales up 31.5%. The group also found increasing interest in collect in store services.

Overall, year-on-year growth in high street retail sales have been positive for the last five months. If the trend continues in August, the BDO noted that it will be the first consecutive six months of positive growth since 2010.

Sophie Bevan, head of retail and wholesale at BDO LLP said, “While the overall fashion figures have taken a dip this month, the like-for-like data doesn’t tell the whole story. The bigger picture shows that retailers are holding their resolve and responding to the upturn on the high street—and are confident that shoppers are more willing to pay full price for the right products.” She added, “This results in seasonal discounting being increasingly selective and planned. While in some areas we may be seeing less sales volume, improving margins supports long term sustainable growth for retailers.”