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BDO: Retail Sales See Best Result Since February, Despite Fall

Social distancing sign shopping retail shutterstock_1701116239.jpg

Low consumer confidence means road to recovery remains uncertain, cautions BDO Head of UK Retail, as June marks five consecutive months of negative sales.

As high streets reopened on 15 June and the British economy began its reboot, the high street saw its best result since before lockdown, 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, consisting of both in-store and non-store sales, declined by -14.4% in June from a base of +3.5% for the equivalent month last year. This result marks five straight months of negative like-for-like sales this year. However, thanks to the combined impact of non-essential retail reopening and strong online sales, June’s sales are the best since February.  

The accelerated shift to ecommerce continued as total non-store like-for-like sales rocketed by +102.6% this month from a base of +16.5% in June 2019, marking the third consecutive month where total non-store like-for-like sales recorded an increase above +100%.

Total like-for-like sales were negative for two out of three sectors in June, with homeware the only sector to show sustained positive performance. Lifestyle total like-for-like sales plunged by -23.9% from a base of +0.6% for the same month last year. While lifestyle total like-for-like sales posted the best result (-5.78%) in the third week of June as some retailers began to re-open, this month marks the fifth consecutive month of negative sales for total lifestyle.

Fashion total like-for-like sales fell by -20.9% this month, but from a good base of +4.8% for June last year. The category has now recorded four straight months of negative LFL sales with each month at least partially being impacted by the lockdown of non-essential retail shops.

Homeware, however, saw total like-for-like sales increase by +25.5% in June from a robust base of +7.7% for the equivalent month last year. Total LFLs for homeware saw positive results in each week of June, improving markedly following the re-opening of shops in week three. In stark contrast to other categories, June was the second consecutive month of positive results for the homewares sector, perhaps indicating the public’s appetite for home improvements while confined to their homes during lockdown.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “Despite the opening of non-essential retail and a strong performance of non-store sales in June, retailers have a long way to go to claw their way back following three months of closure.

“It will take time for both retailers to resume operations and for consumers to regain the confidence to head back to bricks-and-mortar establishments. The strength of non-store sales throughout the lockdown shows that spending has not entirely dried up, and while the re-opening of shops will be a welcome sign, for many it may not bring immediate results. Retailers should remain cautious and continue to invest in the ever more critical non-store channel, given the acceleration of the continuing shift to online.

“The reality is that consumer confidence remains historically low, well below pre-crisis levels.  Despite the Government’s ambitious plans, the road to recovery will be challenging and fraught with uncertainty until the real impact of the pandemic is understood, and therefore any early signs of a high street recovery may prove to be a false dawn.”

Source : BDO

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03 July 2020

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