A solid Black Friday was not enough to paper over the deepening cracks in consumer confidence, figures released today by accountancy and business advisory firm BDO LLP reveal.
Overall like-for-like high street sales dropped -1.3% in November, which followed the worst October on record for ten years.
Fashion sales for the month dropped -2.5% year-on-year, cancelling out positive like-for-like growth for sales of lifestyle goods (up 0.9%) and homewares items (up 2.2%). Non-store sales grew by 17.5% for the month.
The in-store sales decline of -1.3% for the month came despite a year-on-year growth of 1.1% over the Black Friday week at the end of the month. Both lifestyle (up 3.9%) and homewares (up 6.6%) grew over the last week of November, with non-store sales peaking at 24.7%.
The first week of November also saw year-on-year growth (up 0.4% overall) as the cold weather sparked sales of winter clothing. But shoppers kept their wallets firmly closed during the middle two weeks of November, with sales down -4.3% and -2.35% year-on-year respectively.
Sophie Michael, Head of Retail and Wholesale at BDO LLP said all the signs pointed to a potentially tough Christmas on the high street.
“Many stores have struggled so far in the final quarter of this year, and a small rise in sales over Black Friday won’t be nearly enough to deliver a positive like-for-like result in the fourth quarter,” she said.
“We believe that the fall in consumer confidence combined with the drop in real earnings due to rising prices is very likely to lead to shoppers cutting back on their discretionary spending whilst maintaining their spend on festive food and drink.
“Retailers will be hoping for a repeat of last year’s massive last-minute festive buying spree, when we saw double digit like-for-like growth in the week leading up to Christmas. It will be a tough decision for retailers on whether to go early on discounting or hold their nerve and retain their stock at near to full price for that possible final week surge. Furthermore, peak revenue events put a massive strain on retailers to provide logistics and infrastructure to enable maximum fulfilment of orders in time for Christmas.”
Notes to editors
Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.
Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high growth businesses that fuel the economy.
We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.
BDO LLP operates in 18 offices across the UK, employing 3,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has revenues of £405m and is the UK member firm of the BDO International network.
The BDO International network provides business advisory services in 154 countries, with 64,500 people working out of 1,400 offices worldwide. It has revenues of $7.3bn.
Alex Black or Yasmin Khostovan
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