Valentine’s fails to warm hearts of retailers as sales slide for fifth year in a row
Valentine’s Day failed to warm the hearts of retailers with like-for-like in-store sales falling -1.6 per cent in February, according to accountancy and business advisory firm BDO LLP.
The poor performance comes from a weak benchmark of -2.2 per cent for the same period last year and is a further blow to a struggling high street which has seen the collapse of two household names, Toys R Us and Maplin, this month. After a negative result in week one and two of February, Valentine’s week provided no respite for retailers leaving their hearts chilled with sales declining by a further -1.07 per cent. The low came in week four when sales dropped by -2.42 per cent, despite the same week the year before seeing Storm Doris battering the UK and hitting high street sales.
According to BDO’s High Street Sales Tracker, this is the fifth consecutive year retailers have seen sales slide in February, with the decline reflecting the extent of the challenges facing the retail sector.
As discretionary spend continues to slow, all three in-store indices – lifestyle, fashion and homewares – were negative last month (-0.6%, -1.9% and -4.2%) compared with robust volume sales in essentials, such as groceries.
While non-store like-for-like sales provided some relief this month (+15.8%), it was still the lowest monthly growth seen for non-store sales since April 2017 and the worst February since at least 2010 when BDO records for non-store sales began.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “With wage growth still running behind inflation, discretionary spend is on the slide. At the same time, the shift of spend to experiences from material goods is adding to the challenges faced by retailers.
“Despite tough trading conditions, retailers must continue to invest in adapting their business models to the new world of consumerism, where the customer experience is becoming ever more attractive to the consumer purse.
“Turning to the month ahead, the snow storms will have resulted in impossible trading conditions for physical shopping. Retailers will be focused on the product offering for Mother’s Day and Easter to bring some relief to what has been a torrid start of retail trading in 2018.”