UK shoppers save rather than spend in June, fashion struggles says BDO

Sandra Halliday

Опубликовано
6 июл. 2018 г.

When a sales tracker release contains the word “crippling”, you know that times are tough and on Friday, BDO’s High Street Sales Tracker (HSST) for June said that a year-on-year sales dip of 1.7% capped off a crippling first half of the year.

It was the first time in at least 12 years that in-store growth failed to exceed 1% in a single month for the first half of a calendar year. The HSST figures also showed June to be the fifth successive month of negative in-store growth.

Fashion was down 2.3% during the month on a like-for-like basis while lifestyle goods dipped 0.3% and homewares fell 2.4%. And even non-store sales (ie online) grew only 10.4%, the lowest year-on-year increase since December 2015 as retailers struggled to cope with further declines in consumer confidence. 

“Two years on from the EU referendum and the consumer purse is still under significant strain amid sluggish wage growth,” BDO said.

But was it just consumer caution that was the problem? Not necessarily. BDO also blamed torrential rain and localised flooding across parts of the UK that hurt footfall and sales, with overall year-on-year in-store sales plunging by 6.5% in the first week of June.

Week two (+2.65%) and week three (+1.7%) saw sales grow, albeit from a poor base the year before, thanks to a combination of Father’s Day and a ‘World Cup bump’.

But the final week ended down by 5.4% year-on-year “as the scorching weather made it too hot to shop for many." This pushed the overall year-on-year figure for the month down to that -1.7%.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “The bleak and crippling start to the year shows no sign of abating, with deep discounting set to eat into margins that are already being stretched paper-thin by poor sales and rising costs, including the much-discussed issue of unfair business rates on high street retailers.

“These numbers confirm what many retailers have already suspected – this has been the worst first half of a calendar year for more than a decade,” she explained.

BDO said spending on food and drink or leisure and entertainment is still being “prioritised over fashion or big ticket items for the home. People have simply reined-in their spending, online and in-store, and extreme weather of snow in March and heatwaves in June has only exacerbated this trend.”

The business consultancy said that “it will take a monumental change in fortunes on the high street to turn 2018 into anything other than an annus horribilis.”

The findings from BDO’s High Street Sales Tracker come just days after the independent review of the UK high street by former Wickes and Iceland CEO, Bill Grimsey. The Grimsey Review 2 estimates that 28,000 retail jobs have disappeared in 2018 and a further 40,000 are predicted to go by the end of the year.