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October treat overshadowed by November lockdown

06 November 2020

Desperate retailers face disastrous golden quarter with second lockdown and lack of Brexit clarity

While high streets saw signs of recovery in October, a second national lockdown has sent retailers into survival mode, new figures by accountancy and business advisory firm BDO LLP reveal.

According to BDO’s High Street Sales Tracker (HSST), total in-store like-for-like sales fell by -27.7% this month from a marginally positive base of +0.7% for October 2019. But with non-store like-for-like sales rising by +86.0% to the best result since June, total LFLs (combined in-store and non-store) ascended into positive territory (+1.6%) for the first month since January.

However, this boost risks being undermined by the devastating financial impact of a new month-long lockdown in England. With another closure of non-essential shops, the high street is set to miss critical weeks of Christmas trading.

Each sector recorded a negative in-store result in October. Lifestyle in-store like-for-like sales plunged by -19.8% this month from a negative base of -1.9% last year. The result marks nine straight months of negative like-for-like sales for in-store lifestyle, despite recording one of the best weekly results since March in the second week of October.

Fashion in-store like-for-like sales also suffered a nosedive, falling by -36.2% this month, but from a base of +1.7% for October 2019. This month’s result is the eighth month of negative like-for-like sales for in-store fashion this year and marks the worst result for the category since July.

Homeware ended its good run, as in-store like-for-like sales for the sector dropped by -6.4% this month, but from an excellent base of +6.6% last year. Ending a three-month run of either positive or flat like-for-like sales, four weeks of falling like-for-likes during the month confirmed a negative result for October.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “October, while difficult, saw green shoots for the high street and signs of renewed consumer spending. A new lockdown that includes the closure of non-essential shops, however, coupled with ambiguity around Brexit, and little time for adaptation, has poisoned any potential recovery. This has landed retailers in a worst-case scenario in the middle of the critical golden quarter.

“High street brands have spent significant sums to ensure their stores are COVID-secure and build consumer confidence to shop in-store; investment that may now feel wasted.

“New lockdown measures will only add to the woes of many struggling retailers. The accelerated shift online has forced retailers to focus on their online channel and operational logistics, and the closure of stores will inevitably lead to an even faster shift to online. Many may find that their infrastructures are just not there to cope with all sales going through this single channel at a time of peak seasonal trading.

“As 2020 comes to a close, the high street will be banking on consumer resilience, but the reality may consist of spiralling confidence and a chaotic end to an already dire year for retail.”

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 17 locations across the UK, employing 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO International network.

BDO’s global network

The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn. 

Contacts

Erin Dodds or Sophie Isles    
Tel: +44 07802 416548 or +44 0796 4445820
Email: [email protected]