Successive years of falling sales mean October is at risk of becoming a bogey-month for retailers, figures released today by accountancy and business advisory firm BDO LLP reveal.
BDO’s High Street Sales Tracker (HSST) shows UK high street sales in-store sales declined by -2% year-on-year as retailers struggled to reverse October 2017’s sales drop of -5.2%. It is now an unlucky 13 months since the HSST recorded in-store sales growth in excess of 1%.
Not even increased activity in the build up to Halloween could stop the high street suffering the ninth negative month in a row for in-store sales this year as shoppers held out for discounts in the now traditional November discounting season.
Like-for-like sales of lifestyle goods and homewares have recorded negative growth in every month since January, and October was no exception. Neither sector recorded positive growth in a single week of October, falling by -2.9% and -4.1% respectively for the month as a whole.
The cold snap at the end of the month provided a small boost to fashion sales, as shoppers were enticed to upgrade their winter wardrobes. But while the dip in temperature generated a like-for-like growth in the final two weeks of October, an overall sales dip of -1.3% for October – off a terrible base of -7.9% in October 2017 – was gloomily familiar. Fashion has seen bricks-and-mortar sales fail to grow in seven of the ten months of the year-to-date.
There was little respite for retailers online either. Sales for October grew by just 10.5% - the third lowest monthly result on record for non-store since the High Street Sales Tracker (HSST) began recording for this channel in 2010.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said the second poor October in a row was a real worry for stores as they enter the ‘golden quarter’.
“Retailers have seen margins squeezed all year and now they enter a lengthy discounting period in the lead-up to Black Friday,
Such a weak start to the final quarter will have been tough to swallow, and this could easily be the new normal for October as shoppers hold back their discretionary spending until they start seeing bargains.”
Most high street retailers would have taken little solace from Chancellor Philip Hammond’s cut to business rates in his Autumn Budget, she added.
“While the smallest retail businesses will feel the benefit of the cuts announced, they do nothing to support the larger retailers that shoulder almost 70% of the rates burden,” she explained.
These changes would not have helped the stalwart names which we have seen enter into administration or launch a CVA. The recent trading updates, declining footfall and falling like-for-like high street sales clearly needed more substantial action whilst longer term in-depth reviews take place.”
* BDO has been monitoring retail sales for 12 years, with its High Street Sales Tracker first published in January 2006.
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 operates in 17 offices across the UK, employing 4,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has underlying revenues of £464m 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.
Ells Baker or Erin Dodds
Tel: 020 7758 3900
Email: [email protected]