BDO: High Street Sales Flatline in February

• In-store sales grew just +0.6% in February compared to the same month last year
• Total like-for-like sales grew just +1.9%, falling below the rate of inflation for the tenth time in the last 12 months
• Lifestyle sector sales performed particularly poorly, shrinking -0.2%

Total retail sales in discretionary categories (fashion, homewares and lifestyle) grew by just +1.9% in February, compared to the same month last year, according to the latest High Street Sales Tracker from accountancy and business advisory firm BDO. 

This result marks the tenth month out of the past 12 month period that sales growth has been below inflation, meaning actual sales volumes continue to fall. 

While in-store sales rebounded briefly in January as a result of heavy discounting, February saw the high street record an anaemic performance with flat sales of just +0.6%. The lifestyle sector, which includes health, beauty and gifting products, performed particularly poorly, with total sales falling -0.2% and high street sales dropping -1.7%. 

Sophie Michael, Head of Retail and Wholesale at BDO, commented: “Despite the seasonal boost typically associated with Valentine’s Day, there was no sign of consumers rekindling their love for the high street.   

“Whilst inflation has fallen and we’ve seen reports of a small uptick in consumer confidence regarding personal finances, the economic climate remains highly uncertain as UK unemployment has hit a five-year high and wage growth has slowed. This creates a perfect storm of challenges consumers into shops and spending money. Despite consumer confidence rising slightly and inflation falling, spending in discretionary categories remains extremely weak. 

“The concerns don’t end there, as retailers themselves are facing the burden of increasing costs, leading to further delays in investment and reductions in headcount.   

“Gifting events like Christmas and Valentine’s Day have so far failed to deliver and retailers, particularly those in the lifestyle category, will be hoping for a spending boost in March thanks to Mother’s Day. However, the purse strings remain tight with consumers also facing decisions on whether to spend on items or experiences. 

“Looking ahead, retailers must find new ways to adapt and innovate in order to encourage shoppers to part with their hard-earned cash or risk experiencing a Spring that feels as bleak as Winter.”

Source : BDO

Image : tupungato / iStock / 2157254329

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