The high street has suffered its sharpest drop in sales since the financial crisis of 2008 with sales tumbling six per cent in April.
The latest BDO survey shows that fashion retailers suffered the most with a 9 per cent drop in sales last month.
The British Retail Consortium said retail sales were knocked by a “dire month” from fashion outlets as unseasonable weather dampened shoppers’ interest in the launch of spring and summer clothing ranges.
Economic data has recently showed retail sales slowing down after having been a key driver of the UK economy.
Consumer spending has played a crucial part in offsetting weaker export sales and manufacturing growth.
David McCorquodale, UK head of retail at accountants KPMG, said: “Consumers still appear to be hooked on a diet of discounts. Deflationary trends in the sector look set to continue. Overall, retail sales slowed during April with temperatures well below the average for the time of year.”
Meanwhile, credit card firm Barclaycard said consumer spending slowed for the second consecutive month in April, rising by 1.9 per cent, well below the 12-month average of 3.7 per cent.
It said supermarket spending fell by 6.1 per cent in April, its worst performance since Barclaycard began keeping records in 2011.
Barclaycard managing director Paul Lockstone said: “April proved another challenging month for retail as consumers held back in the face of economic headwinds. The feelgood factor they enjoyed in 2015, encouraged by rising employment and increasing household incomes, has been hit by a combination of uncertainty on everything from oil prices to the EU referendum.”
But the report noted an interesting trend that appears to be growing – shoppers are cutting back on essentials in a bid to keep up spending on luxuries such as air travel and restaurants.
Richard Lim, chief executive of Retail Economics, said: “Faced with growing uncertainty around Brexit, a slowing labour market and increasingly fragile confidence, shoppers have cut back on discretionary spending with clothing retailers facing unnerving declines.
“Underlying this poorer economic backdrop, retailers are also swimming against a tide of changing consumer behaviour.“
Mr Lim said the shift from spending on goods to experiences is accelerating.
“In an age of abundance, households are looking to use more of their disposable income on eating out, holidays, leisure pursuits and digital services such as Netflix and Spotify,” he said.
“With the consumer sector the driving force behind the economic recovery so far, it is difficult to see what can compensate should a more widespread slowdown materialise.”
Research by Asda indicates people are choosing to spend money on activities with the family such as trips to the cinema and holidays rather than the weekly shop.
Last week high street bellwether Next issued its second warning of declining sales as it battles recent storms and cold weather. But after blistering temperatures over the weekend, can the likes of Next, M&S, Primark and Yorkshire’s Bonmarche continue to blame the vagaries of the British weather?
While it’s a handy excuse, could it be that retailers are failing to supply the right goods?
It’s interesting to note that one retailer that has beaten the high street gloom is Mountain Warehouse, the UK’s leading outdoor gear specialist which is planning to expand in Yorkshire following strong sales. The recent rainy weather has suited the group’s business model.
“We like places with weather,” said the group’s CEO Mark Neale.
“We tend to do well when the weather is inclement. We sell a lot of kit to keep you warm and dry. Our heritage is wet weather gear.”
So retailers that sell products that people can wear while they go out are beating the trend.
Retailers need to take these changing trends on board if they want to keep the high street afloat.