UK fashion sales drop 4.6 percent in December

Tuesday, 07 January 2014
According to the latest data released by BDO, accountancy and business advisory firm, retail sales for the month of December have not been able to provide relief for the British middle-market high street, which includes the likes of retailers such as French Connection, Hobbs and Gap.

In a statement the firm wrote: “Following on from what was a solid month of trading in November, many retailers will have been left disappointed by a month of lacklustre consumer demand in the crucial Christmas trading period. Pent-up demand was expected to play a larger role as we moved closer to Christmas day but in reality it never fully took hold,” stated BDO.

Like-for-like sales for middle market retailers drop 2.2 percent in December

The firms High Street Sales tracker survey, which outlines the weekly like-for-like sales changes of 85 mid-tier chain retailers, showed that overall like-for-likes sales for middle market retailers in December was down 2.2 percent on a year on year basis. Fashion sales for the retailers dropped 4.6 percent, with UK bargain hunters hitting the sector hard.

Although the report indicated that sales did improve at the end of the month, due to pre-Christmas discounting, the sales surge that many British retailers hoped for failed to occur for many. According to data, like-for-like sales (excluding online trading numbers) declined 6.7 percent during the week to December 22. BDO stated than even a 3.5 percent boost in the week to December 29 was not enough to improve overall performance for the month.

However, the weak performance of in store sales was boosted by 31.1 percent increase in online sales from 2012 and during the week prior to Christmas online sales grew 55.7 percent, another indicator pointing to the growing importance for of having a strong online presence.

The growth in online sales has also be backed up by additional research from independent retail consultant Richard Hyman. He revealed to the Financial Times that online transactions accounted for nearly 20 percent of total retail sales, which is a 5 percent increase from 2012 and adds that non-food online sales accounted for around a third of all Christmas sales.

Don Williams, national head of retail and wholesale at BDO, commented: “As anticipated, online sales and 'click and collect' were the real success stories this Christmas and these figures illustrate just how critical it is for retailers to invest in online routes to market. Many retailers will feel disappointed with reduced footfall in stores but when the technology is right this shows that this need not be a disaster.”

“The big rise in the last week of December, when we started to see discounting, shows that consumers are prepared to hold out until the last minute to pick up a bargain. This suggests that the January sales will encourage shoppers to part with their hard earned cash but there is little room for complacency."

Sales figures for the month of December from the British Retail Consortium are expected to be published this Friday, which will further reveal how the sector performed during Christmas. Recent sales figures released by UK retailers such as John Lewis, House of Fraser, Next and Debenhams show the wide range of sales performance for the month of December, as UK consumers spend their holiday cash carefully.

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