Records broken: January worst for UK store sales, online numbers best, says BDO
We know trading in January was a washout for non-essential store-based retailers. Just how much was underlined on Friday with BDO saying it was the worst January on record. It was also a record consecutive negative two months, taking in the disappointing December period.
Another dismal record was that fashion recorded its 11th consecutive month of negative total like-for-like sales in January.
So how bleak was January overall? Combined in-store and online like-for-like sales last month fell 10%, compared to a +7% reading for the equivalent month last year, according to BDO’s High Street Sales Tracker.
That may not seem so bad, but it would have been a whole lot worse if you strip out non-store (online) sales. They soared last month to their best rise on record — +132.8% year-on-year — as lockdown restrictions shuttered bricks-and-mortar outlets and forced consumers to shop online yet again.
“This boost in online activity prevented sales from falling to the depths of the first national lockdown, though January’s result still marked the worst monthly total like-for-like result since June (-14.4%)”, said BDO.
Predictably, both fashion and lifestyle sectors declined yet again last month, while homewares recorded its ninth consecutive positive result.
Fashion total like-for-like sales in January fell 12.1% from a solid base of +7.7% for 12 months ago.
Lifestyle total like-for-like sales contracted 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.
At least homewares sustained its positive run as total like-for-like sales climbed 6.7% last month, 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)”, noted BDO.
As the year began under a strict regional tier system, the first week of January saw total like-for-like sales fall 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 11.21% from a base of +4.8% 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.
Sophie Michael, head of Retail and Wholesale at BDO, 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 [retailer] 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 mid-market”.
She added: “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.”
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