Store sales fell to their lowest September decline since 2011 as shoppers waited for clarity on Brexit, a new report suggests.
The latest BDO High Street Sales Tracker showed store sales down by 3.1% on a like-for-like basis that strips out the effect of store, and business, openings and closures. That 3.1% fall came on top of a 2.7% fall last September.
Non-store sales, meanwhile, grew by 12.4%, on top of growth of 11.6% last September. Overall, sales were down by 0.7% in September – a year on from growth of 0.3%.
The report pointed to footfall across all but one week in September, compared to last year. In the last week of the month it estimated that visitor numbers to the high street fell by 8%. However, in the penultimate week of the month, they rose by 2.2%. Shopping centres, it said, saw negative results all week, but retail parks saw footfall increase in all but the final week of the month.
The report said that businesses could be forgiven for feeling dizzy as a result of the ongoing volatility, especially in the light of reports that more than a third of bricks-and-mortar retailers re at a higher risk of insolvency. But it added: “For retailers, it is essential that they look to the long-term by continuing to invest in an omni-channel customer experience. Consumers are also waiting for clarity, and the result of this wait-and-see approach appears to be a reduction in discretionary spending. Supportive and responsive government policy, starting with the reform of the business rates regime, could help to alleviate some of this hardship but it is clear that we first need a solution to the current impasse.”
Sales were hardest hit in the lifestyle (-2.1%) category, followed by fashion (-0.6%). However homewares retailers (+5.3%) enjoyed a better month.
Commenting on the figures, Paul Kirkland, director of retail and hospitality at Fujitsu UK & I, said: “These latest sales figures couldn’t make it clearer; the UK high-street is in dire straits and its reliance on seasonal sales and events to drive footfall isn’t working. A major factor in this is that many retailers have simply failed to keep up with changing consumer habits and expectations. Modern consumers don’t expect to just be sold a product, they want their retail experience to give them a sense of belonging, personalisation and convenience. Coupled with the continued impact of the UK’s political and economic uncertainty, retailers must rethink their approach to transformation in order to help revive the high-street and drive future revenue and growth.
“To do this, retailers must begin viewing their stores as a platform for discovery, engagement, experience and interaction, with the goal to use online sales to help drive people in-store.”
Image: InternetRetailing Media/Paul Skeldon