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BDO data reveals “glacial” growth on the high street

09 February 2018

Cold January puts freeze on discretionary spending.

Retailers saw improved performance in the 2018 January sales – but only just, figures released today by accountancy and business advisory firm BDO LLP reveal.

Total like-for-like sales grew at a glacial pace of 0.6% in January, as stores avoided a repeat of last year’s negative growth (sales fell -0.1% year-on-year in January 2017).

All three sectors covered by BDO’s High Street Sales Tracker (HSST) recorded positive growth for the first time since September, but none managed a single percentage point. Sales of lifestyle goods and homewares both recorded year-on-year increases of 0.8%, with fashion stores recording a like-for-like increase of 0.5%.

In fact, excluding last January, the growth during the traditional post-Christmas discounting season was the lowest seen in five years.

The poor figures for the new year sales follow a disastrous festive quarter of trading where overall like-for-like high street sales dropped -2.3% in December alone – the fifth successive December to record negative sales growth.

Significantly, retailers failed to drive shoppers online during the cold weather too. Like-for-like non-store sales grew by 17.4% in January – the first January to post non-store growth below 20% since 2010. The sluggish growth online is a stark contrast to the same time last year, when online shopping grew 26.6% year-on-year. 

Sophie Michael, Head of Retail and Wholesale at BDO LLP said: “The glacial pace of growth on the high street reflected the extent to which consumers are shifting their spending from material goods to experiences while simultaneously seeing their disposable income shrink. 

“High street retailers face intense competition for consumers’ attention at the moment,” she said. “Whilst January started with positive - albeit low - growth, when temperatures dropped and discounting eased off, like-for-like sales declined.

“In the battle for the consumer purse and with so much choice across all retail channels, it is vital that retailers maintain their investment in the customer experience and a differentiated product, while protecting their margins against the backdrop of rising retailer costs.”

ENDS

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

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 underlying revenues of £428m and is the UK member firm of the BDO International network.

BDO’s global network

The BDO global network provides business advisory services in 162 countries, with 74,000 people working out of 1,500 offices worldwide. It has revenues of $8.1bn. 

Contacts

Alex Black or Erin Dodds
Tel:      +44(0)20 7758 3900
Email: [email protected]