Christmas fails to light up the high street

High street retailers witnessed an “underwhelming” December, despite an earlier forecast for growth over the Christmas trading period.

Figures released today by accountancy firm BDO show overall like-for-like sales among mid-market UK retailers last month were down 2.2% year on year.

Last minute present shopping saw non-fashion sales pick up in the final week, offsetting a weak start to the month, but fashion sales were down 4.6% overall, with poor weather and savvy bargain hunters hitting the sector particularly hard, the report noted.

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In November, CBI revealed that 41% of retailers predicted sales growth for December, 18% expect sales to decrease, giving a rounded balance of +24%.

Strong sales were forecasted in clothing, grocery and health & beauty sectors, but the home and DIY category were expected to stay stagnant.

But despite a poor performance on the high street over Christmas, non-store sales were up 31.1% on 2012.

The week before Christmas saw non store sales increase 55.7% – an impressive figure against a strong like-for-like, BDO noted.

BDO national head of Retail and Wholesale Don Williams 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,” added Williams.

He suggested that January sales will encourage shoppers to part with their cash, but warned that there is little room for complacency.

“January is a cruel month for the high street as retailers are usually sitting on high cash holdings and low stock levels so they are particularly exposed at this time of year,” Williams said.

 

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