BDO’s monthly High Street Sales Tracker (HSST) recorded a massive 4.3% drop in year-on-year sales for November. The drop equalled the largest fall in monthly like-for-like sales this year, and retailers will have to go back to November 2008 to find a more severe monthly dip.
Mixed messages and confusing discounting strategies contributed to a downturn across all sectors. Sales of lifestyle goods were down 4% and fashion stores, already reeling from the mild autumn weather, dropped 4.9% on this time last year.
While homewares rallied with a growth of 5.5% as discounting on furniture persuaded people to buy, the spending slowdown also affected online sales.
Non-store sales, which represent pure play online retailers and the digital outlets of bricks and mortar stores, grew just 15.1% year on year.
While the headline figures paint a sorry picture of Christmas trading so far, Sophie Michael, Head of Retail and Wholesale at BDO, said the underlying narrative was more positive for retailers.
“The monthly growth of 15.1% is the third lowest ever recorded by BDO’s HSST index for non-store sales since our records began five years ago. But with this month’s figures being compared to such strong growth in November 2014 (+25.6%), an overall monthly increase greater than 20% would have been a big ask. Furthermore, for Black Friday week itself, non-store sales growth was 20.1% demonstrating the relative success of online through the Black Friday period.”
“Last year’s Black Friday caught many stores off-guard, and panic discounting played havoc with stock levels, leading to erosion in margin and reputational damage when websites crashed and logistics went awry,” she explained.
“This year retailers were far more organised and tried to create a pre-Christmas shopping event that works for the UK shopper, with many extending offers over a number of days rather than just the Friday. Retailers beefed up their servers and fulfilment centres, and opted for strategic, staggered discounts that were more closely aligned to stock levels."
“The net result was a fall in sales against a high base, but retailers may well have protected their margins. The anecdotal evidence so far is that, whilst there have been some hiccups, fulfilment has been much smoother than last year, which must be seen as a success,” she added.
“Now Black Friday is out of the way, store-owners will be banking on people having money in their pockets to satisfy pent-up demand in December and spark a pre-Christmas rush of festive shopping to end the year on a high.”
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