Home Business News Retailers are looking to the Chancellor for targeted support at the Spring Budget

Retailers are looking to the Chancellor for targeted support at the Spring Budget

by Thea Coates Finance Reporter
8th Feb 24 8:57 am

Total like-for-like retail sales fell -0.8% in January across discretionary spend categories, according to new data from BDO’s High Street Sales Tracker.

This marks the fourth successive negative sales performance since October 2023 after a poor performance for retail’s crucial ‘Golden Quarter’.

Sophie Michael, Head of Retail and Wholesale at BDO, said, “The sector saw very poor sales in the last three months of 2023 – the so-called ‘Golden Quarter’. Retailers across discretionary spend categories would have been hoping that January discounting might provide a much-needed boost to sales, but unfortunately this wasn’t the case.”

BDO’s report showed that despite online sales increasing +3.2%, this was offset by a -4.2% drop for in-store sales, with shoppers choosing to stay at home as much of the country faced storm disruption and a period of very cold weather.

Looking at sector performance, despite the fashion and lifestyle categories seeing an increase in total like-for-like sales, it was another negative month for the homewares sector, with the category seeing sales fall by -8.4%. In-store homewares were particularly poor, with sales declining by -10.1%.

Sophie added, “We’ve already seen retailers discounting heavily this month and they may well have to continue these promotions longer than planned in order to attract customers and reduce unwanted stock levels.

“This month was pivotal for recouping losses retailers suffered in the run-up to Christmas, but the absence of a substantial recovery will deepen the gloomy outlook.

“With the upcoming business rates adjustment in April, the rise in the National Living and Minimum Wage and operational costs still running high, the cost of running high street stores continue to increase and already tight profit margins will be put under even more pressure.

“As we approach the Spring Budget in March, retailers will be looking to the Chancellor for targeted support. We know measures such as a rethink on the so-called ‘tourist tax’ are already being considered which would be a welcome boost to the sector, but this alone may not go far enough in the current climate.”

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