UK sales struggled in February, fashion fell despite mild weather
today Mar 8, 2019
Valentine’s Day, half-term holidays and a spell of warm weather at the end of the month. They may have been good news for some retailers, but in general, they failed to ignite Britons’ interest in shopping.
BDO’s new High Street Sales Tracker (HSST) showed that last month was the “worst February in a decade.” According to the HSST, in-store sales declined 3.7%, following a 1.6% drop this time last year.
It was the 13th consecutive month of negative in-store growth and the worst month for lifestyle in-store sales since November 2008. In-store lifestyle sales fell 4.9%. The news about lifestyle retailers doing badly was particularly worrying given that Valentine’s Day should have boosted them and this suggests that the retail sector as a whole is still under heavy pressure.
Fashion was also struggling last month with a 3.5% drop in-store (it had fallen only 1.9% a year ago). This showed that the month’s mild weather failed to spur enough interest in new season merchandise. The fall was also worrying given that last year, February sales had been hurt by heavy snow, whereas this time the weather should have encourage purchase of the new spring deliveries. It was actually fashion’s worst February since 2009.
Overall, BDO said negative in-store sales were recorded every week in February. The month began with total in-store like-for-like sales declining notably in week one by 5.89% (from a base of -1.59% for the equivalent week last year) and by 1.42% in week two. In week three, in-store sales gained no benefit from Valentine’s Day and actually fell 6.55% like-for-like. The final week of the month, which saw half-term holidays in many areas, decreased by 0.66%.
So does this mean that spending moved online instead? Yes and no. BDO said that non-store sales “also had a tough month,” reporting “sluggish” growth of 12.4% in February. This result was well below the long-run average and marked the lowest like-for-like for the month of February since 2010, when it started tracking non-store sales.
Sophie Michael, BDO’s Head of Retail and Wholesale, said: “Consumer confidence is teetering on the precipice and shoppers are resisting unnecessary spend. It’s clear that shoppers are exercising extreme caution.
“It has been a tough start to the year for the sector and retailers are continuing to fill headlines with poor performances. Brexit uncertainty is proving to have a disproportionate impact on discretionary spending and there’s an increasing sense of nervousness among retailers.
“As the March quarter rent date draws near, and hard on the heels of the poor Christmas trading already reported, it will not be a surprise if we hear of more retail names announcing further structural changes as the sector realigns to this new retail world.”
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