Continued discounting and an end to the Brexit deadlock have resulted in the best month for in-store sales since January 2014, according to figures released today by accountancy and business advisory firm BDO LLP.
BDO’s High Street Sales Tracker (HSST) revealed in-store like-for-like sales increased +5.7% in January, from a marginally negative base of -0.2% in January 2019, as the 2020s roared into life with the high street rallying following a challenging year.
However, retailers are being warned that any recovery is still at an early and unpredictable stage and it remains to be seen if the pickup in confidence will translate into a meaningful boost to the high street.
According to BDO’s High Street Sales Tracker, in-store like-for-like sales were positive in every week of January. This strong performance was consistent across all sectors; for the first time in two years all three categories – lifestyle, fashion, and homeware – recorded positive results in the same month.
In-store homeware sales led the charge, up +8.9% from last year, and the best January result for the segment since 2011.
The beleaguered fashion sector also made an impressive recovery, recording its best in-store January result since 2014 with +5.8% like-for-like growth ending a two-month slide of negative results.
The lifestyle sector performed well too, up +5.1% year-on-year - the best January in-store result for the segment since 2014.
Despite the impressive results, BDO warns this rebound is measured against one of the worst years on record. 2019 was the fifth consecutive year of falling sales for the high street, which resulted in the closure of more than 2,000 stores and the loss of 46,000 jobs1.
Away from the high street, non-store sales continued to go from strength to strength, recording a +18.8% bounce on top of last year’s already healthy base of +19.1%.
Sophie Michael, National Head of Retail and Wholesale at BDO LLP, said: “Despite January being the best month in six years, this may be a false dawn in terms of a high street recovery.
“Whilst like-for-like sales may be positive, other reports show that stock levels of retailers are high and buying orders have again fallen, which suggests that discounting once again is driving sales. Delaying a return to full pricing will ultimately impact on already paper-thin margins. With returns also unaccounted for, the true picture of January has yet to emerge.
“Bargain-hungry shoppers are continuing to acclimatise to increasingly lengthy sales periods, which stores are responding to with discounting still visible on the high street. February will show whether consumer confidence has got a toehold in some kind of recovery for retail.”
1 Store closures and jobs lost according to the Centre for Retail Research
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Erin Dodds or Sophie Isles
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