Tough Christmas for retail despite late rush
A last-minute surge in high street shopping in the week leading up to Christmas was not enough to rescue December trading, figures released today by accountancy and business advisory firm BDO LLP reveal.
Overall like-for-like high street sales dropped -2.3 per cent in December – the fifth successive December to record negative sales growth.
Homewares sales grew by 2.5 per cent in December as families splashed out to get ready for festivities, but sales of lifestyle goods struggled to grow at all (up 0.3 per cent).
Fashion retailers finished off a miserable year by recording a sales dip of -3.8 per cent for December – a fall that came off an already negative base of -1.1 per cent in December 2016. It marked the third month in a row of negative growth for fashion sales, and the eighth month of the year where fashion sales failed to record any growth.
Non-store sales grew 21.4 per cent during December, with a weekly peak of 39.8 per cent in the week that ended with Christmas Eve.
The weekly like-for-like sales growth also reinforced reports of a ‘last minute’ Christmas buying spree. All categories recorded year-on-year growth in the week which ended on Christmas Eve, following the first three weeks of December delivering negative like for like sales.
Helped by the extra day of shopping compared to 2016, sales of lifestyle and fashion goods surged into positive growth (up 8.1 per cent and 3.9 per cent respectively) in the week ending 24 December. Non-store sales also peaked in that week (up 39.8 per cent) but fell away sharply the following week (up just 6.4 per cent) as Boxing Day discounts failed to grab shoppers’ imaginations.
Sophie Michael, Head of Retail and Wholesale at BDO LLP said Christmas had been a question of priorities for consumers.
“The level of disposable income has been gradually falling in 2017 as inflation has now overtaken wage growth. With discretionary spend under pressure, shoppers have been forced to think twice before making their purchases and have shown a preference to prioritise spend on food and drink, home comforts and trips out to restaurants and bars this festive season,” she said.
“Consumer confidence is low, and shoppers have exercised extreme caution or shopped strategically online, rather than visiting bricks-and-mortar stores or making impulse purchases. As such retailers, and in particular fashion retailers, have felt a fall in footfall and consumer spend.”
“Early reports indicate that post-Christmas sales are not particularly promising with Boxing Day expected to show the biggest decline in footfall since 2012. This will be of concern for those retailers who are struggling to find that crucial mix of product, price and in-store experience to attract the shrinking consumer purse.”