UK sales rise in January but growth is slow online and in-store, fashion lags

UK retail improved its performance in January but only just. That’s the message from the latest BDO High Street Sales Tracker (HSST) that showed sales rising a tiny 0.6% on a comparable basis. 

Chilly January saw a weak sales rise in UK stores

A year ago, sales had fallen 0.1% in January but with 2017 factored-out, this year’s growth during the traditional post-Christmas clearance season was the lowest seen in five years.

Of course, compared to recent months, the picture wasn’t so grim as the HSST showed all three sectors BDO tracks enjoying positive growth for the first time since September. But none managed to hit even a 1% rise. 

And fashion was the worst performer. It was up only 0.5%, lagging the three sectors. Meanwhile sales of lifestyle goods and homewares both recorded year-on-year increases of 0.8%. And the researchers said growth during the traditional discounting season was the lowest seen in January since 2013.
The poor figures for New Year sales followed a “disastrous festive quarter of trading where overall like-for-like high street sales dropped 2.3% in December alone – the fifth successive December to record negative sales growth,” BDO said. 

And while shoppers turned online during the cold January weather in large numbers, growth was still slower than it has been in recent years. Comparable non-store sales grew by 17.4% last month – the first January to post non-store growth of below 20% since the BDO HSST began tracking e-sales in 2010.

BDO saying that retailers “failed to drive shoppers online” during the cold weather might seem a little extreme given that e-sales grew in the high teens, but it’s undeniable that growth is slowing noticeably. The year-ago figure was 26.6% so 17.4% was a marked difference as consumers stayed generally cautious and the online market continued to mature.

Sophie Michael, Head of Retail and Wholesale at BDO LLP said: “The glacial pace of growth on the high street reflected the extent to which consumers are shifting their spending from material goods to experiences while simultaneously seeing their disposable income shrink.” 

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