- Retailers record twelfth month of consecutive sales growth
- Total like-for-like sales up by just under 50% compared to February 2021
- Non-store like-for-like sales see substantial fall and second consecutive month of decline
- Cost of living crisis set to hit retailers and drive consumers to seek greater value
The retail sector has continued its successful start to 2022 by recording its twelfth consecutive month of positive like-for-like sales, new figures by accountancy and business advisory firm BDO LLP reveal.
According to BDO’s High Street Sales Tracker (HSST), total like-for-like sales, combined in-store and online, increased by +49.6% in February from a base of -3.1% for the equivalent month in 2021 when the country was in full lockdown.
Total non-store like-for-like sales fell by -19.4%, which is the biggest fall ever recorded by BDO, and marks two consecutive months of decline for non-store like-for-like sales. However, the decline is relative to elevated non-store like-for-like sales (+167.3%) recorded during lockdown in February last year.
Total like-for-like sales saw substantial increases across all categories compared to February 2021. Following growth of +44.04% in the first week of the month, the following weeks saw like-for-like sales growth of +62.34% and +61.43%. In the final week of February, total like-for-like sales rose by +59.20%, from a -7.11% base for the same week in 2021.
Fashion saw the biggest growth, with total like-for-like sales increasing by +68.1% for the month, from a base of -3.6% for the same time last year. This month marked twelve consecutive months of growth, despite non-store like-for-like sales falling in each week of February.
Total like-for-like sales in the lifestyle sector increased by +59.9% in January, from a base of -15.6% for the equivalent month last year.
However, the sector saw a significant fall in non-store like-for-like sales, decreasing by more than a third in each week of the month.
Homeware total like-for-like sales rose by +5.4% in February, from a base of +32.2% in the same month last year. The category extended its run of positive life-for-like sales to twenty-two straight months, despite non-store sales falling by more than 20% each week.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said:
“As we expected, February has seen strong like-for-like sales for retailers. The cost-of-living crisis, although building momentum, is yet to fully impact consumers. Increases in energy prices and National Insurance won’t take effect until April. This may be the point at which the strong discretionary spending we’ve seen over recent months starts to subside. Retailers will also have to navigate the challenge of higher costs, and deciding whether they can absorb these or pass them on to consumers, at a time when the consumer purse is being squeezed.
“As the cost of living rises, some consumers will naturally want to adjust their shopping behaviours and seek out better value products to stretch their finances. At the same time, we also expect demand for higher priced premium products to remain strong. Once again, we may see those mid-level retailers who can’t afford to lower their prices really getting squeezed.
“This is all set against a backdrop of plummeting consumer confidence, which may presage a gloomy outlook for retailers in the next six months. To stay competitive, retailers will need to focus on the right products and product differentiation. Managing inventory levels and pricing will also be essential, as retailers respond to higher operational costs and fluctuating consumer demand.”
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