Shares in FTSE 350 retailers fell on Friday after a survey showed British shops suffered their worst August for three years.
Above-target inflation and stagnant wage growth have dented consumer spending, while the few pounds that Brits did have left over were spent on entertainment or in pub gardens during the summer heatwave.
READ: Retail sales slow in July as hot weather keeps consumers away from the high street
Accountancy and business advisory firm BDO said its monthly High Street Sales Tracker (HSST) showed like-for-likes fell 2.7% in August from a year earlier.
Fashion sales fell 3.6% last month, making it the worst August for the sector since 2015. Read @SophieMBDO's views in @Drapers #retail #fashion #highstreet https://t.co/13muTzf0m9
— BDO LLP (@bdoaccountant) September 7, 2018
That is now seven straight months that in-store sales have fallen, with fashion and homeware retailers suffering the most.
By contrast, online sales of all goods jumped 13.7% as internet-based retailers continue to snatch market share from bricks-and-mortar stores.
In a climate of rising interest rates, prices rising and subdued real wage growth, there is limited discretionary spend left and that is taking its toll on fashion and homeware sales, especially bigger-ticket items,” said Sophie Michael, BDO’s head of retail and wholesale.
Among the fallers were Marks and Spencer Group PLC (LON:MKS) (down 1.2% to 293.7p), Next PLC (LON:NXT) (down 1% to 5,438p) and Dunelm PLC (LON:DNLM) (down 2.3% to 520.5p).