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Sales fall in December for fifth year in a row

05 January 2018

Tough Christmas for retail despite late rush.

A last-minute surge in high street shopping in the week leading up to Christmas was not enough to rescue December trading , figures released today by accountancy and business advisory firm BDO LLP reveal.

Overall like-for-like high street sales dropped -2.3% in December – the fifth successive December to record negative sales growth.

Homewares sales grew by 2.5% in December as families splashed out to get ready for festivities, but sales of lifestyle goods struggled to grow at all (up 0.3%).

Fashion retailers finished off a miserable year by recording a sales dip of -3.8% for December – a fall that came off an already negative base of -1.1% in December 2016. It marked the third month in a row of negative growth for fashion sales, and the eighth month of the year where fashion sales failed to record any growth.

Non-store sales grew 21.4% during December, with a weekly peak of 39.8% in the week that ended with Christmas Eve.

The weekly like-for-like sales growth also reinforced reports of a ‘last minute’ Christmas buying spree. All categories recorded year-on-year growth in the week which ended on Christmas Eve, following the first three weeks of December delivering negative like for like sales.   

Helped by the extra day of shopping compared to 2016, sales of lifestyle and fashion goods surged into positive growth (up 8.1% and 3.9% respectively) in the week ending 24 December. Non-store sales also peaked in that week (up 39.8%) but fell away sharply the following week (up just 6.4%) as Boxing Day discounts failed to grab shoppers’ imaginations.

Sophie Michael, Head of Retail and Wholesale at BDO LLP said Christmas had been a question of priorities for consumers.

“The level of disposable income has been gradually falling in 2017 as inflation has now overtaken wage growth.  With discretionary spend under pressure, shoppers have been forced to think twice before making their purchases and have shown a preference to  prioritise spend on food and drink, home comforts and trips out to restaurants and bars this festive season,” she said.

“Consumer confidence is low, and shoppers have exercised extreme caution or shopped strategically online, rather than visiting bricks-and-mortar stores or making impulse purchases. As such retailers, and in particular fashion retailers, have felt a fall in footfall and consumer spend.”

“Early reports indicate that post-Christmas sales are not particularly promising with Boxing Day expected to show the biggest decline in footfall since 2012.  This will be of concern for those retailers who are struggling to find that crucial mix of product, price and in-store experience to attract the shrinking consumer purse.”

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. 

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