UK high street sales down in January, fashion edges up but is discount-driven
today Feb 8, 2019
There was a surge in physical stores shopping in the first week of January but it wasn’t enough to rescue the month as a whole. That’s the conclusion of the latest BDO High Street Sales Tracker (HSST).
The result was “the worst January since 2013” with in-store sales down 0.2% in January from a base of +0.6% in the same period last year. The slump follows a poor December (down 1.9% year-on-year) and marks the 12th consecutive month of falling in-store sales.
At least fashion and homewares in-store like-for-like sales were marginally up (by 0.6%) in January as retailers managed to shift unsold AW18 inventory with steep price cuts. But the lifestyle category “suffered the cruellest decline” with in-store sales falling by 2%.
The accountancy and business advisory firm said that “deep-seated discounting failed to prevent a lacklustre start to 2019” and the “poor performance follows the high street’s worst year on record as in-store sales reported negative growth every month from February to December during 2018.”
But the month had started well. Heavy discounting in the clearance sales meant the New Year week saw in-store like-for-like sales rising 5.12% from a base of +1.47% for the equivalent week last year. But weeks two to four saw like-for-like sales falling back into negative territory.
“With concerns about the general economic outlook close to hitting levels not seen since the crash in 2008, the deterioration in consumer confidence offset the potential impact of lingering discounts as shoppers reined in [their] in-store spending,” BDO said.
However, non-store like-for-like sales grew by 19.1%, even better than the +17.4% of a year ago. But that crumb of comfort wasn’t enough to make up for the weakness on the high street.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “It has been a calamitous start to the year for the high street. Deeper and earlier discounts may have enticed consumers to shop in early January but this soon disappeared and has put increasing pressure on retailers that are already being stretched paper thin.
“While some reports have referred to an uptick in consumer spending, it’s clear that this is not being seen by the UK high street especially in non-food spending. Looking ahead, innovation will be key in creating an attractive shopping experience and embracing retail theatre to lure consumers back in store.”
Copyright © 2019 FashionNetwork.com All rights reserved.