The UK’s high street has just experienced its worst January sales in four years, according to accountancy and business advisory firm BDO.
January’s like-for-like sales declined by -0.1%, according to BDO’s High Street Sales Tracker (HSST). The company said this marks ‘the first negative growth in the crucial January discounting period since 2013 and comes hot on the heels of a dismal December, which was also down -0.1% year-on-year’.
BDO said: ‘With UK shoppers facing inflation, price increases and political uncertainty in 2017, the lack of consumer spending in the busiest two months of the shopping calendar has left retailers feeling nervous’.
Sales of lifestyle goods grew 1.2% for the month, partly driven by overseas visitors drawn to the UK by the weak pound. Consumers were also quick to snap up discounted homeware items, increasing like-for-like sales in the sector by 2.9% for January.
But, BDO added, the cold snap in the third week of January drove shoppers away from the high street, dragging overall like-for-like store sales down by -4.46% for the week.
The only silver lining for retailers came from online sales, which hit a two-year high for a single month, growing 26.6% in January.
Sophie Michael, head of retail and wholesale at BDO LLP, commented: “By the third week of January, many retailers began to transition between discounted and new lines.
“Although the weather was a factor in discouraging people from visiting the shops, retailers shouldn’t become distracted by this.
“Those with a strong online presence were able to combat falling footfall with strong online sales, particularly in week three, highlighting the need for investment across all channels.
“With a poor start to the year – in what is usually a positive month on the high street – I expect many retailers will be concerned about the year ahead.
“The overwhelming trend for 2017 is going to be uncertainty; whether economic, political or in relation to consumer spending habits.
“But instead of being preoccupied by the external backdrop, retailers ought to ensure they remain agile and focused on product, quality and range to entice customers in-store or online and recreate some of that customer loyalty that has been fast disappearing in recent years.”
She added: “Innovation in customer engagement through all channels will be a key priority for all retailers if they want to stay ahead in 2017.”
BDO LLP operates in 18 offices across the UK, employing 3,500 people offering tax, audit and assurance, and a range of advisory services. It has revenues of £405m and is the UK member firm of the BDO International network, which provides business advisory services in 158 countries, with 68,000 people working out of 1,400 offices worldwide with revenues of $7.6bn.
Sophie Michael, head of retail and wholesale at BDO LLP