When a press release contains words like “fails” and “bleak”, you know it’s not good news. And so it was with the regular monthly High Street Sales Tracker from BDO on Friday.
Headlined “Black Friday fails to rally UK shoppers as a bleak November casts a shadow on retail’s Golden Quarter”, BDO said the big discounts offered during the month didn’t hit the mark with enough shoppers, “resulting in another disappointing month for retailers”.
It said total like-for-like (LFL) sales fell by 0.3% year on year, even though the month started with LFL sales increasing by 4.7% in week one.
But this was followed by falling sales in weeks two, three and four, despite heavy discounting from retailers becoming more prevalent.
Online sales were particularly poor throughout the month and were down by 0.2% against last year. And while in-store LFL sales were up, they didn’t rise enough to offset the negative online performance.
And the even worse news? “The fashion sector suffered the greatest drop in November,” BDO told us. Total sales declined sharply by 3.6% from a robust base of an 8.5% rise last year.
The weak fashion performance stood out even more given that the homewares and lifestyle sectors grew (by 5.2% and 2%, respectively).
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “The overall figures, and in particular the fashion sector’s poor performance in both store and non-store categories, suggest that Black Friday promotions and discounts alone are not enough to encourage consumer purchases. In fact, such events are merely proving to erode margins further; only collectively can retailers break this cycle.
“With discretionary spend still tight, it looks like consumers may be choosing to spend their budget on one slightly bigger item rather than several less expensive ones, thus bringing overall volumes down.
“Looking ahead, 2024 will continue to be a challenging period for the sector as business rate rises loom for many and the increase in the National Living Wage adds further pressure to overheads. In the event that consumer spend does pick-up significantly and retailers have a bumper December, it’s unlikely it will be enough to recover the Golden Quarter.”
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