High street suffers worst January since 2013

shutterstock.com/Pressmaster

An early surge in in-store shopping in the first week of the month couldn’t rescue high street retailers from the worst January since 2013, figures released by accountancy and business advisory firm BDO LLP reveal.

According to BDO’s High Street Sales Tracker (HSST), in-store high street sales dropped -0.2% in January from a base of +0.6 in the same period last year, as deep-seated discounting failed to prevent a lacklustre start to 2019.

January’s decline marked the twelfth consecutive month without growth for in-store like-for-like sales and the worst January since 2013, according to BDO. The poor performance follows the high street’s worst year on record as in-store sales reported negative growth every month from February to December during 2018.

Showing initial signs of promise, heavy discounting produced good results in the first week of January with total in-store like-for-like sales increasing by +5.12% from a positive base of +1.47% for the equivalent week last year.

However, weeks two to four saw like-for-like sales dip into negative territory. With concerns about the general economic outlook close to hitting levels not seen since the crash in 2008, the deterioration in consumer confidence offset the potential impact of lingering discounts as shoppers reined in in-store spending.

Though both fashion and homeware in-store like-for-like sales were marginally up by +0.6% in January, lifestyle suffered the cruellest decline with in-store sales falling by -2.0% in January. This result marks the twelfth consecutive month of negative results for in-store lifestyle like-for-like sales.

Despite a poor start to the year for the high street, non-store like-for-like sales grew by +19.1% this month from a strong base of +17.4%.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “It has been a calamitous start to the year for the high street. Deeper and earlier discounts may have enticed consumers to shop in early January but this soon disappeared and has put increasing pressure on retailers that are already being stretched paper thin.

“While some reports have referred to an uptick in consumer spending, it’s clear that this is not being seen by the UK high street especially in non-food spending. Looking ahead, innovation will be key in creating an attractive shopping experience and embracing retail theatre to lure consumers back in store.”