BDO: Retail Sales Fall To Worst Month On Record

Discretionary spend on hold in March as Brits begin lockdown and switch spend to essentials

Britain’s high street retailers endured their worst month on record for both in-store and total sales following the outbreak of COVID-19 in the UK, new figures by accountancy and business advisory firm BDO LLP reveal.

According to BDO’s High Street Sales Tracker (HSST), total like-for-like sales, combined of both in-store and non-store sales, dropped -17.9% this month from a base of +6.5% in March 2019.

In-store like-for-like sales plummeted a record –34.1% this month from a base of +4.8% for March last year. Reduced footfall due to social distancing and isolation, diverted demand from discretionary to essential items, and enforced store closures in the final week of March all contributed to the worst results on record for total in-store like-for-like sales.

Each sector suffered a decline this month. Lifestyle in-store like-for-like sales decreased by –24.6% this month from a negative base of -2.7% last year. In-store sales for lifestyle were negative throughout the month leading to the worst month on record for the category.

Fashion in-store sales plunged by –40.4% in March from a base of +8.2% last year. In-store like-for-like sales for fashion were negative in every week of March, falling progressively until the final week (-99.28%) which only saw a two-day trading week prior to lockdown. The result marks the worst on record for in-store fashion.

Lastly, homeware in-store sales declined by -26.1%, but from a base of +9.0% last year. This month’s result marks the worst like-for-like for in-store homeware since May 2018.

As shoppers turned to ecommerce, non-store like-for-like sales increased by +13.7% in March from a base of +18.7% last year. Total non-store sales continued to show growth, however the increase was not consistent across all sectors as fashion retailers experienced a substantial drop in demand across all channels this month while lifestyle retailers saw good results online.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “It’s no surprise that March was the worst month on record for the high street, as the COVID-19 outbreak had an immediate impact on consumer demand for discretionary items.

“Understandably, shoppers are being very cautious with their pounds, as concerns about job security grip the nation. For most retailers, in-store sales make up the largest portion of their revenue, so they are having to rely solely on non-store channels and adapt aggressively to survive. It is likely that the pandemic has only sped up the shift away from in-store shopping as consumers become even more accustomed to buying on-line.  .

“It is vital for all retailers to navigate and adapt through the immediate challenges ahead, whilst also starting to consider longer term strategic planning for the future once the lockdown lifts and normality resumes.

“For now, businesses and consumers will be looking to the government for help and clarity.  Although many will welcome the extent of government support provided, most if not all retailers will still carry heavy costs associated with inactive shops. Ultimately, a frank and open dialogue is now needed together with collaboration from all parties to achieve viable outcomes.”

Source : BDO

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