Online sales surge as high streets lag

Online sales at British discretionary retailers increased by 10.1% in October, substantially outpacing growth at physical stores as colder weather and promotional activity helped improve trading across fashion, lifestyle, and homeware businesses.

The latest High Street Sales Tracker from BDO recorded a 4.6% increase in total like-for-like sales compared with October 2025, the strongest monthly performance since January last year.

Although the result marked an improvement for retailers after a difficult trading period, sales growth remained heavily weighted towards digital channels. Physical stores recorded an increase of just 2.2%, below the prevailing rate of inflation.

October was only the third month of 2026 in which the tracker recorded overall growth above inflation. The result indicates stronger sales volumes across participating discretionary retailers, rather than an increase attributable entirely to higher prices.

Fashion provided a particularly clear example of the difference between channels. Online fashion sales rose 9%, while in-store sales increased by 2.1%. BDO linked the improvement partly to falling temperatures, which encouraged shoppers to purchase winter clothing after several months of warmer weather.

Promotional activity also contributed to trading conditions. Retailers have been using discounts to stimulate demand among consumers who remain cautious about discretionary purchases and sensitive to changes in household expenditure.

BDO’s national head of retail and wholesale, Sophie Michael, identified both colder weather and promotional pricing as likely contributors to the improvement. She also cautioned against interpreting a single strong month as evidence of a sustained recovery.

The figures cover discretionary categories rather than the entire UK retail market. BDO’s tracker monitors participating businesses selling fashion, lifestyle products, and homewares, excluding major grocery chains that account for a substantial proportion of essential consumer spending.

That distinction separates the tracker from the Office for National Statistics’ broader retail sales measures. The BDO results describe like-for-like trading among participating retailers, making them particularly useful for examining differences between sales channels and non-food categories.

The continued advantage enjoyed by online channels presents a complex picture for retailers operating physical estates. Stores remain important for customer service, product discovery, collection, and returns, but their sales performance continues to trail the growth achieved through websites and digital platforms.

Online growth can also involve additional costs. Delivery, fulfilment, product handling, and reverse logistics affect the margins earned on individual transactions, particularly when businesses use promotional pricing to attract orders.

Physical stores face different costs, including rent, staffing, energy, maintenance, and the operation of premises regardless of daily customer volumes. Businesses managing both channels must therefore assess profitability across their operations rather than treating online sales growth as equivalent to improved earnings.

The October figures arrive at an important point in retailers’ annual trading cycle. Businesses are committing resources to Christmas stock, temporary staff, distribution capacity, and marketing while attempting to assess whether improving sales momentum will continue through November and December.

The reported 4.6% increase provides a stronger starting position than recent monthly results, particularly for retailers exposed to winter clothing and other seasonal purchases. However, the gap between online and physical stores remained pronounced.

BDO’s findings show discretionary retail sales recovering during October, supported by digital spending and seasonal demand, while physical store growth continued to fall below inflation. The sector enters its busiest trading period with stronger sales but persistent pressure on the economics of operating across both channels.