BDO High Street Sales Tracker Records Negative Growth In January

• Retailers record second consecutive negative month
• Lockdown sees online sales rocket to highest result on record
• Lifestyle and fashion sectors both negative, while homeware continues positive run

After a disappointing Christmas, retailers recorded their worst January result since BDO started recording total like-for-like sales in 2017, as a national lockdown shuttered shops across England, new figures by accountancy and business advisory firm BDO LLP reveal.

According to BDO’s High Street Sales Tracker (HSST), total like-for-like (LFL) sales, combined in-store and online, declined by -10.0% in January, but from a very good base of +7.0% for the equivalent month last year. Non-store sales, however, soared to their best result on record in January (+132.8%) as lockdown restrictions shuttered bricks-and-mortar outlets once again. This boost in online activity prevented sales from falling to the depths of the first national lockdown, though January’s result (-10.0%) still marked the worst monthly total like-for-like result since June (-14.4%).

Weekly Results and a New Year in National Lockdown

As the year began under a strict regional tier system, the first week of January saw total like-for-like sales decrease by -10.68% from a strong base of +13.41% for the same week last year. Then as the third national lockdown came into effect mid-week, the second week of the month saw total like-for-like sales decline by -11.21% from base of +4.80% last year. Total like-for-like sales continued to shrink by -19.69% and -5.86% in the middle of January from bases of +9.33% and +4.18% for the same weeks last year. Finally, the last week of January saw total like-for-like sales drop by -9.42% from a base of +1.91% for the same week last year.

Sector Results

Both the lifestyle and fashion sectors declined this month, while homeware recorded its ninth consecutive positive result.

Lifestyle total like-for-like sales contracted by -16.7% in January, but from a good base of +8.5% for the same month last year. This month’s result marks the worst since June last year and the second consecutive month of negative total like-for-like sales for the sector.

Fashion total like-for-like sales also declined this month, falling -12.1% from a solid base of +7.7% for January last year. This marks a dismal eleven consecutive months of negative total like-for-like sales for fashion.

Homeware saw sustained positivity, however, as total like-for-like sales climbed by +6.7% in January from a base of +5.4% for the equivalent month last year. Total like-for-like sales for homeware have continued to stand apart from other sectors as it logged its ninth straight month of positive sales, having only seen a decline in one week of January (-1.32% in week one).

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said:

“You would normally see positive growth at the start of the year thanks to the post-Christmas sales, but this year retailers experienced a bleak January after a very lacklustre Christmas.

“Recent administrations point to a squeeze on the middle market. With unemployment set to rise further, the hit to discretionary spend will likely push shoppers towards value retailers and ever-growing online retail platforms, putting further pressure on the midmarket.

“The future for retailers is currently clouded by uncertainty with significant challenges ahead. Retailers have the additional problem of predicting how and when consumers will return, and at what level of spending.  Added to this, consumers are already displaying potentially lasting new shopping habits and varying product preferences, across all age groups.  These challenges together with the need to provide a COVID secure environment are no small feat given the mounting pressures they face.

“Providing a road map out of lockdown is a tall order, but one that retailers desperately need so they can begin to plan for a sustainable future.”

Source : BDO

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