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High street sees worst February in eight years

10 March 2017

Second month of the year harks back to financial crash.

Storm Doris hit the headlines last month after 95mph winds caused chaos on the roads and rail networks, and figures released today by BDO reveal she also severely damaged the UK’s high streets.

According to BDO’s High Street Sales Tracker (HSST), UK retailers have just experienced their worst February since 2009, with like-for-like sales dropping -2.2%.

The decline, coming off an already negative base of -1.7% for February 2016, marks the third month in a row of negative growth and the forth consecutive February with no growth.

Year-on-year fashion sales were down -3.4% in February – the poorest result for the sector since September 2016 (when they dipped -5.9%).

Sales of homewares also fell for the first time since June 2016 – down 1.4% year-on-year – as households tightened their belts against rising prices. Even online sales slowed, growing at just 19.9% in February.

Strong sales of Valentines goods helped the lifestyle sector register weak growth of 0.4% year-on-year for February, but this couldn’t counteract a fall in footfall as the harsh weather hit the UK at the end of the month.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said the figures laid bare the intense pressure on consumers’ discretionary spending.

“Yesterday the Chancellor told us growth in the economy was expected to be higher - and borrowing lower - than forecast in November, but that hasn’t translated into consumer spending power,” she said.

“February saw a perfect storm – both figuratively and literally. Doris kept shoppers away from the high street, but the relatively poor growth of online sales in February shows that the economic headwinds significantly curbed spending.

“The majority of retailers’ price hedges ran out at the end of last year, and inflationary cost pressures have forced them to increase prices – sharply in some cases.

Retailers, more than ever before, should focus on product, quality, range and service. They should provide a differentiation which encourages and enables their target customer ‎to justify paying full price at a time when the consumer purse will begin to tighten.  

“Whilst these cost headwinds are a cause for concern, retailers need to find ways to ride out the storm and look to opportunities relevant to their business, such as exports or international expansion. At the same time, the Chancellor’s decision in the Budget to spend £435m minimising the impact of Business Rates will also be welcomed.”

ENDS


Note 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

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.

BDO International

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. 


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