The signs so far are that February has been a disappointing month for UK retail. The CBI report suggested as much earlier this week and on Friday, BDO’s regular monthly High Street Sales Tracker showed fairly anaemic behaviour, especially in-store.

And while fashion didn’t see a repeat of the big falls this time last year, sales were flat year on year, which means they didn’t recover the ground lost by those earlier falls.

So let’s look at the numbers. Total like-for-like sales in discretionary categories by value were up 2.3% in February, BDO said, having been down 1.3% during February 2024. That meant a slight recovery from last year’s drop but not by a very big margin and it tracked below the rate of inflation.

And in-store, discretionary sales grew only 1.2%, failing to make up for the 2% drop in the same month of the previous year.

Overall revenue growth was driven by online sales seeing a more healthy 5% uplift this time.

As mentioned, fashion had it tough. In-store fashion retailers registered no growth at all (+0.0%) in February, from a very poor base of -8.2% last year. In-store sales in the crucial category were obviously below inflation, meaning that sales volumes actually shrank in February compared to the same month last year. 

This persistent poor performance not only reflects the fact that consumers continue to hold back on non-essential spending in light of persistently high household and food costs, but “points to the longer-term decline of the UK high street,” BDO said.

Sophie Michael, Head of Retail and Wholesale at BDO, said: “Retailers are struggling to justify investment in their store estates as consumers continue to move more online and spend less on discretionary items. Retailers have already been clear that they are planning to reduce capital investment in the next 12 months, exacerbating the fundamental challenges facing bricks-and-mortar retail – a sector that remains vital to local economies throughout the country.

“The fashion sector — traditionally a cornerstone of UK high streets — appears particularly vulnerable as consumers understandably prioritise spending on essential items. Heavy discounting is required to drive sales in this category, which is a tough call for retailers that are already operating on razor-thin margins.

“Looking ahead, the coming months will be challenging for retailers. We are edging closer to the introduction of National Insurance changes and increases to the National Living Wage, higher business rates and the Plastic Packaging Tax. These all come at once and put huge pressure on an industry that is already heavily challenged under the weight of its operating costs.

“We know the Government is firmly focused on growth. Retailers urgently need support to navigate these mounting cost pressures or many may fail to remain competitive in an increasingly challenging market.”