Figures released on 10th February 2017 by accountancy and consultancy firm BDO reveal that January retail sales declined compared with the previous year.
Fashion retailers were hit the hardest in the worst January figures reported for four years.
Such a poor start to the year is likely to cause increasing anxiety in a sector that continues to face challenges and now has to deal with severe currency fluctuations and uncertainty over import and export markets and costs.
BDO’s High Street Sales Tracker revealed a drop of -0.1%, but it is the first drop recorded in a January since 2013, traditionally a month when post-Christmas sales drive an increase in sales. It also masks a steep drop of -4.5% in the third week of the month, thought to have been caused by the cold snap across the UK.
Effects will be compounded as December 2016 featured a similarly disappointing sales drop, a very rare occurrence in the run-up to Christmas.
The weather put people off shopping and the fashion sector put in a particularly poor performance. Overall figures for in-store sales for that cold third week dropped by -4.46%.
Over the month, lifestyle goods saw a 1.2% rise (month-on-month) and it’s thought that much of that was caused by overseas shoppers taking advantage of the weak pound. Similarly, discounted homeware goods rose by 2.9% compared with last January.
Fashion in the doldrums?
These relatively high rises in other sectors show how poorly fashion has fared, although there are marked differences between the high street and online sales.
Despite the drops in high street figures, online retail sales soared by 26.6% across the whole month, the highest figure recorded in any one month for two years.
Sophie Michael of BDO, said: “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.”
She added: “The overwhelming trend for 2017 is going to be uncertainty; whether it be economic, political or in relation to consumer spending habits.
“But instead of being preoccupied with the external backdrop, retailers ought to ensure they remain agile and focused on product, quality and range to entice customers in a store or online and recreate some of that customer loyalty that has been fast disappearing in recent years.”
Innovation in customer engagement and a focus on multiple channels will be the priorities for retailers throughout the coming year.