Sales fall in December as discounting fails to save high street from a disastrous 2018.
A last-minute surge in high street shopping in the final week of December was not enough to save the crucial Christmas trading period, figures released today by accountancy and business advisory firm BDO LLP reveal.
According to BDO’s High Street Sales Tracker (HSST), in-store high street sales dropped -1.9% in December from a negative base of -2.3% in the same period last year. This decline marked the sixth successive December to record negative sales growth, despite retailers resorting to heavy discounting in the final week of the month.
Last month also marked the worst year on record for in-store like-for-like sales, with 2018 recording 11 consecutive months of negative sales growth since January.
Homeware sales were the lone bright star on the high street and grew by +9.3% in December as families splashed out to get ready for festivities, with a strong boost in the final week of the month, posting growth of +24.04% as retailers slashed prices.
Lifestyle retailers, however, ended a dismal year with sales plunging by -3.9% in December, and dropping as far as -9.95% in the second week of the month. While heavy discounting produced a bump of +17.47% the week of Christmas, results still marked the worst December for in-store lifestyle sales for a decade.
Fashion sales also fell in-store by -2.0% year-on-year in December, falling further from an already dire base of -3.8% for the same month last year. The result marks the sixth consecutive December with negative in-store sales for fashion and five consecutive months of decline.
Non-store sales grew 11.9% during December, with strong results at the beginning of the month and in the final week before Christmas as shoppers opted to do their last-minute purchasing online.
The weekly like-for-like sales growth also reinforced reports of a ‘last minute’ buying spree as Christmas and Boxing Day discounts got underway.
The last full week before Christmas, which included Frenzied Friday and Super Saturday, saw a significant decline of -4.86%, but from a good base of +5.31% last year. The final week of the month which included Boxing Day saw discounting provide a significant boost to in-store sales, increasing by +7.02%, but from a negative base of -3.84% for the same week last year.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “As retailers suffered the worst year for a well over a decade for in-store sales, it’s clear that consumer confidence is low. Shoppers have exercised extreme caution or shopped strategically online, seeking out discounts rather than visiting bricks and mortar stores or making impulse purchases. The shopping spree retailers were hoping for in December didn’t happen, with only heavy discounting convincing consumers to part with their pounds.”
Sophie adds: “We started 2018 with the collapse of Toys R Us and Maplin and ended it with the administration of HMV, and there was a long line of well-established brands in trouble in between.
“There is a huge amount of nervousness in the market and consumer confidence – a key driver of spend – is brittle. Having suffered the sixth successive December of negative in-store sales growth, the UK high street is starting the year on shaky ground. Unfortunately, 2019 is set to be another challenging year for retail.”